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Sunday, August 14, 2022

Mortgage rate hikes help drive down housing prices in the Denver area

Recent interest rate hikes have begun to cool Denver’s red-hot housing market.

A report by Redfin shows that 46.7% of home sellers in the Denver Metro lowered their prices in May.

Daryl Fairweather, chief economist at Redfin, says, “There are two types of sellers in today’s market: those who already know the market, those who have cooled, and those who are learning about the cold market as they learn more about the sales process. pass by.”

“The former wants to sell quickly before the market slows further and they are willing to immediately price them slightly below comparable homes in their neighborhood, and the latter may have to lower their price if their home is available to buyers within a few weeks. Doesn’t attract. .. as more sellers come along with a slowing market, fewer homes will drop in prices.”

The Redfin report shows Denver’s median home selling price in May was $614,000.

still a seller’s market

8z real estate agent Chad Murphy says sellers need to use accurate pricing and cannot expect to receive offers of $10,000 to $100,000 at list price.

He says increased inventory and higher interest rates keep homes in the market longer. More homes remain available for more than 14 to 30 days, rather than selling in a few days.

There is still not enough inventory to balance the market, but the changes should be more favorable to buyers.

As a result, some sellers offer credit to pay closing costs or buy-off points to help offset interest increases.

“It’s a changing market,” he says. “But until we see more inventory, this will remain a sellers market.”

West + Main real estate agent Susan Frisch says she hasn’t seen any price reductions in popular metro areas so far.

“Where supply is limited, prices are not coming down,” she says.

Monthly payments continue to climb

Even with some price fluctuations, high interest rates may drive some potential buyers out of the housing market.

A study by Zillow shows that the monthly mortgage payment for a typical home purchased in Metro Denver in May was 54.5% higher than in May 2021.

This pushed the “typical” Denver monthly mortgage payment to $3,394.

“The past two weeks have seen an unprecedented jump in mortgage rates and a rapid rise in housing costs,” Zillow economist Nicole Bachaud said in a release.

“We are already seeing signs of a slowdown in demand, and expect these recent rate hikes to accelerate the necessary rebalancing of the market. While buyers will experience less competition for homes than in recent months, their purchasing power has dwindled.

World Nation News Desk
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