Rising mortgage rates cool Colorado’s boiling real estate market
DENVER (KDVR) – U.S. monetary policy is cooling the Denver metro real estate market somewhat, but the area is still far from affordable or having a healthy inventory.
In response to record inflation levels, the US Federal Reserve raised interest rates in the first half of 20222, ending a two-year period of some of the easiest monetary policies in national history. . Mortgage rates haven’t peaked this high this quickly since the 1970s, ending May with an average rate of 5.23% for a 30-year fixed rate mortgage.
Colorado’s housing market reacted. Prices stagnated and inventories rose in late spring and early summer.
Home prices are still higher than they have ever been, but they have softened. The median selling price of a single-family detached home peaked in April at $680,000 after climbing every month since the start of the year.
Likewise, inventories have increased since the beginning of the year. In January, the Denver metro area had just 1,719 new single-family home listings. In June, it had 5,674.
Denver’s market competitiveness is no longer at the crazy stage it once was, according to Nicole Rueth, branch manager producer and senior vice president of the Rueth team at Fairway Mortgage. Home sellers cannot command the prices they charged when inventories were at their lowest.
“Buyers are being discerning,” Rueth said. “If they think the price of real estate is too high, they will ignore it. And we see that. We’re seeing a lack of viewing, we’re seeing a lack of offers, and we’re seeing longer days on the market for homes that want everything their neighbor sold last week or last month.
Still, Rueth says the market is still firmly a seller’s market. A healthy housing market should have between four and six months of inventory. Even with three times January’s housing inventory, Metro Denver still only has about two months of inventory. As prices have fallen, Rueth said she doesn’t expect any bubble to burst in Colorado’s future.
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