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.

Posted on June 19, 2020 at 12:24 pm
Paul Hunter | Category: About the area, Buyer Tips, Friday Fun Facts, Homes for Sale, Real Estate | Tagged , , , , , ,

2019 Economic and Housing Forecast Preview

2019 Economic and Housing Forecast 
By Matthew Gardner, Chief Economist, Windermere Real Estate 

What a year it has been for both for the U.S. economy and the national housing market. After several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market. As the year comes to a close, it’s time for me to dust off my crystal ball to see what we can expect in 2019.

The U.S. Economy

Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth before we likely enter a recession in 2020. Yes, it’s the dreaded “R” word, but before you panic, there are some things to bear in mind.

Firstly, any cyclical downturn will not be driven by housing. Although it is almost impossible to predict exactly what will be the “straw that breaks the camel’s back”, I believe it will likely be caused by one of the following three things: an ongoing trade war, the Federal Reserve raising interest rates too quickly, or excessive corporate debt levels. That said, we still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.

The U.S. Housing Market

Existing Home Sales
This paper is being written well before the year-end numbers come out, but I expect 2018 home sales will be about 3.5% lower than the prior year. Sales started to slow last spring as we breached affordability limits and more homes came on the market. In 2019, I anticipate that home sales will rebound modestly and rise by 1.9% to a little over 5.4 million units.

Existing Home Prices
We will likely end 2018 with a median home price of about $260,000 – up 5.4% from 2017. In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market. I’m forecasting the median home price to increase by 4.4% as rising mortgage rates continue to act as a headwind to home price growth.

New Home Sales
In a somewhat similar manner to existing home sales, new home sales started to slow in the spring of 2018, but the overall trend has been positive since 2011. I expect that to continue in 2019 with sales increasing by 6.9% to 695,000 units – the highest level seen since 2007.

That being said, the level of new construction remains well below the long-term average. Builders continue to struggle with land, labor, and material costs, and this is an issue that is not likely to be solved in 2019. Furthermore, these constraints are forcing developers to primarily build higher-priced homes, which does little to meet the substantial demand by first-time buyers.

Mortgage Rates
In last year’s forecast I suggested that 5% interest rates would be a 2019 story, not a 2018 story. This prediction has proven accurate with the average 30-year conforming rates measured at 4.87% in November, and highly unlikely to breach the 5% barrier before the end of the year.

In 2019, I expect interest rates to continue trending higher, but we may see periods of modest contraction or levelling. We will likely end the year with the 30-year fixed rate at around 5.7%, which means that 6% interest rates are more apt to be a 2020 story.

I also believe that non-conforming (or jumbo) rates will remain remarkably competitive. Banks appear to be comfortable with the risk and ultimately, the return, that this product offers, so expect jumbo loan yields to track conforming loans quite closely.

There are still voices out there that seem to suggest the housing market is headed for calamity and that another housing bubble is forming, or in some cases, is already deflating.  In all the data that I review, I just don’t see this happening. Credit quality for new mortgage holders remains very high and the median down payment (as a percentage of home price) is at its highest level since 2004.

That is not to say that there aren’t several markets around the country that are overpriced, but just because a market is overvalued, does not mean that a bubble is in place. It simply means that forward price growth in these markets will be lower to allow income levels to rise sufficiently.

Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. While these buyers face challenges regarding student debt and the ability to save for a down payment, they are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.

Posted on January 6, 2019 at 9:08 pm
Paul Hunter | Category: About the area, Buyer Tips, Evans Real Estate, Fort Collins Real Estate, Homes for Sale, Investment, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , , , ,

Friday Fun Facts! A History Lesson

Posted on October 19, 2018 at 2:23 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Homes for Sale, Investment, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , , , ,

Friday Fun Facts!


Memory Lane

Today I will take a fun trip down memory lane.

Did you know that it was the fall of 1981 (I was -2 years old!) when mortgage interest rates hit their all time peak? Yes it was this time 36 years ago when 30-year mortgage rates hit 18.39%


It’s important to note that in those days, not many home buyers were opting for a 30-fixed loan because rates were so high. There were a lot of people looking at adjustable rate products as a way to reduce the monthly payment.

Just for fun, let’s look at what a monthly payment would look like if those same rates from 1981 existed today.

If rates were 18.39% today, a $350,000 home with a 20% down payment would have a monthly principal and interest payment of…

$4,309! Yikes!

Thank goodness rates aren’t that high today. They are actually about 15% lower!

Today’s 30-year rate sits at 3.83% (which by the way is roughly half of the long term average).

A monthly principal and interest payment on a $350,000 home with 20% down is…

$1,309. Three thousand dollars lower than it would be using 1981 ‘s rates.

For a detailed look at what’s happening across Colorado, request my quarterly market report called “The Scoop.”

Posted on September 29, 2017 at 2:14 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Investment, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , , ,

Where Is The Market Right Now?

As we hit the middle of the year, it is good to look not only back at where the market has been, but forward to where the market is going. There are several interesting factors at the moment that make this a slightly different market than it was 5 months ago, but the big things to keep an eye on for both Buyers and Sellers are:

  • Interest Rates
  • Housing Starts (new construction)
  • Days on Market
  • Inventory

Interest Rates remain low for the time being, and this is an opportunity for both Buyers and Sellers. Low interest rates make payments more affordable for Buyers, but also make it so that Buyers qualify for more home for their buck making it easier for Sellers to realize higher sales prices. As we start to see interest rates increase towards the end of this year and heading in to next year, this opportunity will slow down for EVERYONE in the market.

Housing Starts are actually down in Colorado right now (even thought it seems new construction is everywhere!), which means we most likely will continue to see a shortage of new homes, driving more Buyers to the resale market keeping that inventory tight. As construction defects legislation allows builders to build condos and townhomes though, hopefully we will see more of those start to come down the pipeline. We’ll keep an eye on that for you.

As you can see below (information from the Fort Collins Board of REALTORS), for the Fort Collins area Days on Market has decreased by 8.7% for single family homes, indicating Buyers are still out there wanting homes!


You can also see that we are seeing increasing inventory though, but 13.3% which means there is a little bit more for Buyers to look at, good news to those who have been making offers and losing out.

So opportunities exist for both Buyers and Sellers in this market, and there are pockets that have more strength for one party or another. If you are interested in learning more about the market you may be interested in buying in or have a home to sell and want to see what that looks like for your particular area, please give me a call or shoot me an email. Thank You!

Posted on July 17, 2017 at 5:19 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Investment, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , , , , , , ,

Do You Think Interest Rates Will Go Up?

Happy Monday morning everyone! What are your thoughts on where interest rates are going? Check out our thoughts below!

Posted on June 19, 2017 at 1:32 pm
Paul Hunter | Category: About the area, Buyer Tips, Fort Collins Real Estate, Investment, Loveland Real Estate, Real Estate, Seller Tips, Wellington Real Estate, Windsor Real Estate | Tagged , , , , ,

High End Opportunities

Low Inventory. How often have you heard that mentioned in the media, or by me on my blog!? We are at historic lows for both interest rates and available housing inventory. But, there are some opportunities for those buyers looking to sell their homes and purchase something more expensive. If you are looking to downsize or purchase a home with a more reasonable payment there are absolutely ways to do that as well and we can have that discussion next week!

Whether you are having more kids, got a promotion, or just need more space for the dog, there are a lot of opportunities for buyers looking to upgrade their home. As we know, homes are selling quickly in the Northern Colorado area. We have a shortage of new homes (I have two available right now HERE and HERE if you would like to take a look!), and a lot of buyers looking to take advantage of the amazingly low interest rates. But, as you get in to the higher price ranges, there are fewer buyers, and homes aren't receiving multiple offers as often which makes it a little bit less stressed of a marketplace. 

Check out the info below that shows all of Fort Collins' price ranges. We are still hovering around a month worth of inventory (SUPER low when a balanced market is defined by the National Association of REALTORS at 6 months of inventory).



But, if you look at the info below, we are at almost 6 months worth of inventory for homes over $750,000. So that beautiful remodel in Old Town or newer construction on the southeast side of Fort Collins will be easier to attain than fighting over a $400,000 in the middle of town.



If you have considered the possibility of selling, or just want to talk real estate or grab coffee give me a call and I'd love to meet up! Have a fantastic week!


Posted on September 13, 2016 at 1:57 pm
Paul Hunter | Category: About the area, Buyer Tips, Investment, Real Estate, Seller Tips | Tagged , , , , ,

The Sky ISN’T Falling! Fed Rate Hike Discussion

Federal Reserve Building, Washington DC, USA

Federal Reserve Building, Washington DC, USA

I hope you are all ready for Christmas time, it is getting here too quickly!

I want to direct you to an article that was brought to my attention yesterday that outlines the reasons that the change in the Federal Reserve's long standing position of no rate increases won't necessarily mean a direct correlation to an increase in interest rates for homes. It has to do mainly with the fact that interest rates are affected more by the bond/fixed securities market, which is not expected to change much just yet.

CHECK THE ARTICLE OUT HERE, and please feel free to give me a call or shoot me an email with any questions!

Posted on December 18, 2015 at 5:37 pm
Paul Hunter | Category: Real Estate | Tagged , ,