September 2024 Denver Metro Market Watch

September 2024 Denver Metro Market Watch Lower interest rates and a dip in home prices have inspired buyers to re-enter the Denver Metro housing market. According to REcolorado’s September data, 3,805 home contracts were executed, marking a 28% increase from the same time last year and a 5% rise compared to August. The motivation comes as potential buyers found a broader selection of homes available, with inventory levels not seen in a decade. Sellers contributed to already high inventory levels by adding 5,029 new listings to the market in September—10% more than last year—though slightly fewer than in August. Homes are spending more time on the market before selling, with an average of 26 days in REcolorado’s MLS system, an 11-day increase compared to last September and 4 days longer than August’s average. Active inventory surged by 50% compared to last year, with 11,143 homes listed for sale by the end of September. Amid these local shifts, consumer confidence has also seen improvement. The Fannie Mae Home Purchase Sentiment Index® (HPSI)  rose to 73.9 in September, the highest level in over two years. This uptick reflects growing optimism that mortgage rates will decrease over the next year. Despite this positive sentiment, only 19% of respondents believe it’s a good time to buy a home, though 65% say it’s a good time to sell. Closings on home sales in the Denver Metro area were down slightly, with 1% fewer transactions than September 2023 and 14% fewer than last month. The median home price dropped 2% year-over-year to $575,000 and was 3% lower than August. In the rental market, activity also slowed. REcolorado reported that 289 rental properties were leased in September, down 6% from last year and 12% from August. The median rent decreased by 4% year-over-year, while 411 new rental listings were added—a 19% drop from the previous month. Active rental inventory increased slightly, with 738 properties available, 4% more than last month. As the market adjusts to changing economic factors, buyers and renters alike are finding more options. A key indicator of future market activity is the number of pending listings, which typically leads to increased closings in the following months. With the uptick in pending listings this September, the Denver Metro housing market is poised for more closings in the coming months and a strong fourth quarter. Source: https://recolorado.com/september-2024-market-stats/

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August 2024 Denver Metro Market Watch

August 2024 Denver Metro Market Watch The Denver metro area’s housing market exhibited a notable increase in buyer activity in August, according to the latest report from REcolorado, the state’s leading multiple listing service. The surge in activity is attributed to a combination of decreasing interest rates and an ample supply of homes on the market. Throughout August, buyers executed contracts on 3,877 home listings—a 10% rise from August 2023 and a 6% increase from July 2024. This heightened activity comes as inventory levels remain robust, with 10,497 homes actively available for sale, marking the second consecutive month that active listings have exceeded the 10,000 mark. This level of inventory is the highest seen in over a decade. The influx of new listings has outpaced the number of closings. Since the beginning of 2024, sellers have introduced 41,573 new listings to the market, while 28,224 homes have been closed during the same period. Homes are spending a median of 22 days on the market before selling—10 days longer than August 2023 and 5 days longer than the previous month. This extended timeframe reflects a shift in market dynamics, providing homebuyers with more time to make decisions. The number of closings in August was lower compared to both the previous year and the previous month as many buyers delayed their home-buying decisions. A total of 3,711 homes closed in August, marking a 6% decrease from last year and a 2% drop from July. However, with the substantial number of pending listings, a rise in closings is anticipated in the coming months. The median closed price for homes in August was $590,000, which is a modest 1% increase from last year but 2% lower than the previous month. The market is expected to remain active this fall, as moderated home prices and anticipated further decreases in interest rates may encourage continued buyer engagement. In the rental market, August saw 329 properties leased through REcolorado MLS, with a median leased price of $2,965—2% higher than the same time last year. The month also saw the addition of 505 new rental listings, bringing the total number of active rental properties to 707, a 5% increase from the previous month. Overall, the Denver metro housing market continues to evolve with increased inventory, extended home-selling timelines, and a dynamic rental sector, setting the stage for a potentially active fall season. Source: https://recolorado.com/august-2024-market-stats

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2025 Housing Market Forecast: What To Expect

2025 Housing Market Forecasts: What To Expect Looking ahead to 2025, it's important to know what experts are projecting for the housing market. And whether you're thinking of buying or selling a home next year, having a clear picture of what they’re calling for can help you make the best possible decision for your homeownership plans. Here’s an early look at the most recent projections on mortgage rates, home sales, and prices for 2025. Mortgage Rates Are Projected To Come Down Slightly Mortgage rates play a significant role in the housing market. The forecasts for 2025 from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo show an expected gradual decline in mortgage rates over the course of the next year (see chart below): Mortgage rates are projected to come down because continued easing of inflation and a slight rise in unemployment rates are key signs of a strong but slowing economy. And many experts believe these signs will encourage the Federal Reserve to lower the Federal Funds Rate, which tends to lead to lower mortgage rates. As Morgan Stanley says: “With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly.” Expect More Homes To Sell The market will see an increase in both the supply of available homes on the market, as well as a rise in demand, as more buyers and sellers who have been sitting on the sidelines because of higher rates choose to make a move. That’s one big reason why experts are projecting an increase in home sales next year. According to Fannie Mae, MBA, and NAR, total home sales are forecast to climb slightly, with an average of about 5.4 million homes expected to sell in 2025 (see graph below): That would represent a modest uptick from the lower sales numbers in 2023 and 2024. For reference, about 4.8 million total homes were sold in 2023, and expectations are for around 4.5 million homes to sell this year. While slightly lower mortgage rates are not expected to bring a flood of buyers and sellers back to the market, they certainly will get more people moving. That means more homes available for sale – and competition among buyers who want to purchase them. Home Prices Will Go Up Moderately More buyers ready to jump into the market will put continued upward pressure on prices. Take a look at the latest price forecasts from 10 of the most trusted sources in real estate (see graph below): On average, experts forecast home prices will rise nationally by about 2.6% next year. But as you can see, there’s a range of opinions on how much prices will climb. Experts agree, however, that home prices will continue to increase moderately next year at a slower, more normal rate. But keep in mind, prices will always vary by local market. Bottom Line Understanding 2025 housing market forecasts can help you plan your next move. Whether you're buying or selling, staying informed about these trends will ensure you make the best decision possible. Let’s connect to discuss how these forecasts could impact your plans.

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