14 Times
For the 14th time this year, 30-year mortgage rates set a record and hit an all-time low.
Based on data just released by Freddie Mac, rates are now at 2.71%. Their weekly survey of the 30-year mortgage rate dates back to 1971.
Just one year ago rates were at 3.68%.
So, what does this mean for buyers?
Based on a $400,000 loan, current rates result in a monthly payment that would be $212 less than one year ago.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.
A Little Perspective
A Little Perspective
Here’s a little perspective on the inventory of homes for sale in today’s market…
First we’ll look at Metro Denver:
• The average number of residential listings for sale at this time of year is 15,577
• The highest-ever for this time of year is 29,722 which occurred in 2006
• The number of listings right now is 4,821
• So, inventory in Metro Denver is roughly one-third of the average and 25,000 fewer than the highest-ever.
• DMAR is the source of the stats listed above
Now, Northern Colorado:
• Larimer County has 802 active listings today
• Based on 10 years of data, this is the lowest it has ever been
• The high in Larimer County occurred in 2010 with 2608 listings so today’s inventory is one-third of what it was 10 years ago.
• Inventory today in Weld County is 727 which isn’t the lowest-ever.
• The lowest during the last 10 years was 2017.
• The highest was 2010 with 1791 properties so today there are roughly 1,000 fewer properties to choose from.
The Votes are In
Real estate buyers made their voices heard last month and made a clear choice for… higher-end properties!
One of the interesting dynamics of our current market is the significantly- increased activity in higher price ranges.
The combination of high equity and low interest rates is clearly causing people to move up. They are able to purchase the home that has the features they have always wanted whether it be size, finishes, or location.
The considerable equity growth that has occurred for homeowners over the last 7 years is allowing them to have sizable down payments on their ‘move up’ property plus today’s rates keep their monthly payments lower than expected.
Here are the numbers we researched which demonstrate this trend.
Compared to October of 2019, sales of properties priced over $750,000 last month were up:
• 176% in Larimer County
• 375% in Weld County
• 96% in Metro Denver
Properties in the $550,000 to $750,000 range also saw a large jump:
• 57% in Larimer County
• 63% in Weld County
• 83% in Metro Denver
This is a unique time in history for people to move up and own a home they have always dreamed about.
New Home Surge
Sales of new homes have jumped to their highest levels in 14 years.
The annualized rate of single-family new construction homes is now at 901,000 according to the new Census Bureau report.
This means that across the U.S., at the current pace of sales, there will be almost 1,000,000 new homes built and sold over the next 12 months.
This pace is 36% higher than one year ago and the highest it has been since the end of 2006.
Given the low inventory levels of previously-owned homes that most of the Country is experiencing, this uptick in new home activity is welcome news.
Start it UP!
Start it Up
As further evidence that the housing market is more than alive and well, new home starts have recently jumped across the U.S.
Building of residential properties is up 23.4% compared to last year and up 22.6% from last month.
Pre-pandemic demand for new homes was very high. Now, record-low interest rates are fueling the market to new highs.
At Least List
Periodically we track a stat which we find to be quite interesting.
It answers this question – how many properties are selling for at least list price (asking price or higher)?
This stat tells us how active the market is and helps our buyers to realize that, in some cases, they will be in a competitive situation.
When we look at single-family home sales so far this month, this is what we find:
57% of properties in Larimer County sell for at least list price
62% of properties in Weld County sell for at least list price
So, in well over half of the transactions, buyers need to offer list price or higher to acquire the property.
The data gets even more interesting when this information is broken out by price range.
To no one’s surprise, the percentage increases for properties priced under $400,000:
81% in Larimer County
70% in Weld County
We find that for properties over $400,000 the percentages still tell a story of a very active market:
47% in Larimer County
56% in Weld County
Bottom line, in most locations and price ranges we see a strong sellers’ market where buyers need to be prepared to make a strong offer and to also compete.
Spring in Summer
This year the Spring market is occurring in the Summer.
Typically the busiest months for real estate along the Front Range are April, May and June.
This year, because showing activity was restricted in the Spring months, we are seeing robust activity this Summer.
Here’s an indicator. Sales through July 2020 versus July 2019 are up:
12.6% in Metro Denver
13.7% in Northern Colorado
To see double-digit increases in sales despite was is occurring in the National economy, is nothing short of remarkable.
Rate Meaning
Mortgage interest rates have hit another record low this week.
Mortgage applications for purchases just hit an 11-year high.
Rates are at a level that many people could never have imagined.
Here’s something that is surprising to many people…
Rates are 1.5% lower than they were just two years ago.
Here’s what that means for buyers…
Pretend someone is looking at a $500,000 home and they will have a 20% down payment.
The difference in monthly payment is $320 between two years ago and today.
Obviously that is a significant amount of money.
Imagine what a person could do with $320 per month.
The fact that rates are at record lows is one of many reasons that the market is so strong right now and prices continue to appreciate at healthy levels.