Front Range Real Estate Market Update, November 30, 2023

This morning, mortgage rates hit their lowest levels in almost three months. The average rate for a 30-year fixed mortgage is still above 7%, but this is an improvement compared to the highs we saw in August and September.

We’ll see what happens with rates in the coming weeks, but for now, lower rates have moved more buyers to apply for purchase loans. 

Joel Kan, Vice President and Deputy Chief Economist at the Mortgage Bankers Association says, “Rates have declined more than 50 basis points over the past six weeks, which has helped to spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago. The purchase market remains depressed because of the ongoing low supply of existing homes on the market. Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”

What’s in store for 2024?

Economists and others are releasing their predictions for next year. 

Morgan Stanley just released a 59-page report, and if their predictions are correct, it could mean good news for home buyers. They say home prices will fall 3% on average nationwide next year.

Ellen Zentner, Morgan Stanley’s chief U.S. economist, said, “Home prices should see modest declines as growth in inventory offsets the increase in demand. By 2025, with lower rates, existing home sales should rise more convincingly.”

We’re unsure if Morgan Stanley’s predictions will come true in Metro Denver. There is a lot of pent-up demand for homes here. Demand could continue to outpace supply, leading to a rise in prices or, at the minimum, keep prices relatively stable.

For perspective, the median price for a home sold between January and October 2023 is down 1.8% from the same period in 2022, from $570,000 to $560,000, but up 12.3% from $520,000 during the same period in 2021.

Let’s make it happen! If you’re thinking about buying or selling a home, contact David and Tom at The Principal Team for a free, no-obligation consultation. Call us now at 720-782-2468 or schedule a time for us to call you.