October 2024 Denver Metro Market Watch

October 2024 Denver Metro Market Watch October was a month of heightened activity for the Denver Metro Area housing market, according to recent data from REcolorado Multiple Listing Service. In fact, market activity surpassed what we’ve seen over the last two years. More homes closed in October than during the same month in both 2023 and 2022. Additionally, there was a 6% increase from September’s closing numbers. Record-High Median Prices Driven by Luxury Home Sales The median closed price for single-family homes rose to an unprecedented $599,000, the highest on record for October. This rebound follows a price dip from August to September and shows a 4% increase month-over-month. Much of this growth came from the luxury market, as closings of homes priced between $1 million and $2 million surged by 34%. The month even saw five homes close at $5 million or more, including an impressive $8.3 million property in Old Cherry Hills. More Listings Hit the Market, Boosting Buyer Options Sellers kept up the pace, adding 4,644 new listings to the market in October. This influx represents a 22% increase over last October, but a seasonal 8% month-over-month decrease of 8%. Notably, over 8% of these new listings are in the $1 million to $2 million price range, offering prospective buyers a wider selection of luxury properties. Buyer Activity and Contracts Continue Upward Trend Buyer activity continued to gain traction, with contracts executed on 3,619 homes in October—23% more than the previous year and 3% higher than last month. Pending home sales, a leading indicator for future sales. The median time it took a listing to go from active to pending rose slightly to 27 days, a 10-day increase from October 2023 and just a one-day increase from September. Supply Levels Reflect Increased Demand and Seasonal Patterns The number of actively available listings in Denver Metro at the time of the October data pull was 44% higher than a year ago, yet showed a slight 3% decrease from September due to increased buyer demand and fewer new listings. A Surge in the Rental Market October also brought significant movement in Denver’s rental market. A total of 321 properties were leased through REcolorado’s MLS, marking a 9% increase over October 2023 and an 11% increase month-over-month. While the median leased price dipped slightly by 1% from last year, rental listings surged. Throughout the month, 411 new rental properties were listed, a 14% jump from last October and a 12% increase from September. At the end of the month, there were 771 rental listings actively available, 4% more than last month. The Takeaway The Denver Metro housing market continues to display resilience, with growing buyer interest, an influx of new listings, and record-breaking home prices, especially in the luxury sector. As we head into the final months of the year, the strong market dynamics indicate a robust foundation for future growth. Buyers, sellers, and renters alike are navigating an active and evolving market as Denver remains a prime real estate hub in Colorado. Source: https://recolorado.com/october-2024-market-stats/

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What's Behind Today's Mortgage Rate Volatility?

What’s Behind Today’s Mortgage Rate Volatility? If you’ve been keeping an eye on mortgage rates lately, you might feel like you’re on a roller coaster ride. One day rates are up; the next they dip down a bit. So, what’s driving this constant change? Let’s dive into just a few of the major reasons why we’re seeing so much volatility, and what it means for you. The Market’s Reaction to the Election A significant factor causing fluctuations in mortgage rates is the general reaction to the political landscape. Election seasons often bring uncertainty to financial markets, and this one is no different. Markets tend to respond not only to who won, but also to the economic policies they are expected to implement. And when it comes to what’s been happening with mortgage rates over the past couple of weeks, as the National Association of Home Builders (NAHB) says: “. . . the primary reason interest rates have been on the rise pertains to the uncertainty surrounding the presidential election. Although the election is now complete, there continue to be growing concerns over budget deficits.” In the short term, this anticipation has caused a slight uptick in mortgage rates as the markets adjust and react. Additionally, factors like international tensions, supply chain disruptions, and trade policies can drive investor sentiment, causing them to seek safer assets like bonds, which can indirectly impact mortgage rates. Essentially, the more global or domestic uncertainty, the greater the chance that mortgage rates may shift. The Economy and the Federal Reserve Inflation and unemployment are two other big drivers of mortgage rates. The Federal Reserve (the Fed) has been working to bring inflation under control, and has been closely monitoring the economy as they do. And as long as inflation continues to moderate and the job market shows signs of maximum employment, the Fed will continue its plans to cut the Federal Funds Rate. Although the Fed doesn’t set mortgage rates, their decisions do have an impact, and typically a cut leads to a mortgage rates response. And in their November 6-7th meeting, the Fed had the data they needed to make another cut to the Federal Funds Rate. And while that decision was expected and much of the mortgage rate movement happened prior to that meeting, there was a slight dip in rates. What To Expect in the Coming Months As we look ahead, mortgage rates will respond to changes in the Fed’s policies and other economic indicators. The markets will likely remain in a wait-and-see mode, reacting to each new development. And, with the transition of a new administration comes an element of unpredictability. A recent article from The Mortgage Reports explains: “Today’s economic indicators come with mixed pressures on mortgage rates and we’re likely to be in for a good amount of volatility as markets adjust and respond to the election . . .” The best way to navigate this landscape is to have a team of real estate experts by your side. Professionals will help you understand what’s happening and can provide you with the guidance you need to make informed housing market decisions along the way. Bottom Line The takeaway? Today’s mortgage rate volatility is going to continue to be driven by economic factors and political changes. Now is the time to lean on experienced professionals. A trusted real estate agent and mortgage lender can help you navigate through it. And with the right guidance, you can make informed decisions.

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Renting vs. Buying: The Net Worth Gap You Need To See

Renting vs. Buying: The Net Worth Gap You Need To See Trying to decide between renting or buying a home? One key factor that could help you choose is just how much homeownership can grow your net worth. Every three years, the Federal Reserve Board shares a report called the Survey of Consumer Finances (SCF). It shows how much wealth homeowners and renters have – and the difference is significant. On average, a homeowner’s net worth is nearly 40 times higher than a renter’s. Check out the graph below to see the difference for yourself: Why Homeowner Wealth Is So High In the previous version of that report, the average homeowner’s net worth was about $255,000, while the average renter’s was just $6,300. That’s still a big gap. But in the most recent update, the spread got even bigger as homeowner wealth grew even more (see graph below): As the SCF report says: “. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.” One big reason why homeowner wealth shot up is home equity. Equity is the difference between your home’s value and what you owe on your mortgage. You gain equity by paying down your mortgage and when your home’s value goes up. Over the past few years, home prices have gone up a lot. That’s because there weren’t enough available homes for all the people who wanted one. This supply-demand imbalance pushed home prices up – and that translated into faster equity gains and even more net worth for homeowners. If you’re still torn between whether to rent or buy, here’s what you should know. While inventory has grown this year, in most places, there’s still not enough to go around. That’s why expert forecasts show prices are expected to go up again next year nationally. It’ll just be at a more moderate pace. While that’s not the sky-high appreciation we saw during the pandemic, it still means potential equity gains for you if you buy now. As Ksenia Potapov, Economist at First American, explains: “Despite the risk of volatility in the housing market, homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.” But prices and inventory are going to vary by area. So, lean on a local real estate agent. They’ll be able to give you the local trends and speak to the other financial and lifestyle benefits that come with owning a home. That crucial information will help you decide the best move for you right now. As Bankrate explains: “Deciding between renting and buying a home isn’t just about cost — the decision also involves long-term financial strategies and personal circumstances. If you’re on the fence about which is right for you, it may be helpful to speak with a local real estate agent who knows your market well. An experienced agent can help you weigh your options and make a more informed decision.” Bottom Line If you’re not sure if you should rent or buy, keep in mind that if you can make the numbers work, owning a home can really grow your wealth over time. And if homeownership feels out of reach, let’s connect so we can explore programs that may make buying possible. 

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