Blog • Fun Facts • May 21, 2022

What We Notice

by Rondi duPont

Here is what we notice about the market right now:

Listings are receiving fewer offers compared to 60 days ago – instead of 10 offers, a listing might have 2.
There are now several instances of a listing only having one offer.
Sellers who were overly-aggressive with their list price have to quickly reduce in order to generate activity.
Inventory is up and in some areas significantly, giving buyers more options and flexibility.
Home buyers who are under contract with a new home waiting for that new home to be built have been negatively impacted by rising rates.
More buyers are considering 7 and 10-year mortgage products in order to have a lower interest rate.
The pendulum is swinging away from the drastic seller’s market we have seen for the last 18 months.

Blog • Fun Facts • April 15, 2022

Interest-ing

by Rondi duPont

The recent increase in mortgage rates has started some home buyers to look at programs that have fixed rates for 7 years or 10 years instead of 30 years.

If a buyer believes it is likely they will move or even refinance within this timeframe, these types of programs can be a good option.

The obvious benefit is a lower monthly payment compared to a 30-year program.

Another benefit, which most people underestimate, is the savings in interest.

Today, for example, a buyer would have these options:

5.25% 30-year fixed
4.375% 10-year fixed
4.125% 7-year fixed

Over the first five years of the loan, the buyer would pay the following amounts in interest for each loan program for a $400,000 loan:

$101,126 for 30-year
$83,764 for 10-year
$78,831 for 7-year

So the savings in interest over the first five years compared to the 30-year program is:

$17,362 for 10-year
$22,295 for 7-year

Blog • February 28, 2022

War and Interest Rates

by Rondi duPont

Our clients are curious to know what the conflict in the Ukraine will mean for mortgage rates.

The short answer is down in the near term and up in the long term.

Generally speaking, economic and political uncertainty drive people to invest in bonds rather than stocks, which puts downward pressure on interest rates.

So, in the near term, the conflict in the Ukraine will push rates down slightly. We have already seen this happen as 30-year rates have dipped in the last few days.

The conflict is likely to push oil prices up which means higher gasoline prices. This will cause upward pressure on inflation, which ultimately causes upward pressure on interest rates.

So, the longer the war lasts in Europe, the more likely it is to push interest rates even higher.

Blog • Fun Facts • February 18, 2022

Money at a Discount

by Rondi duPont

This week, for the first time in 32 months, mortgage rates hit 4%.

While this increase may feel painful for buyers currently looking at property, it is important to put today’s rates in perspective.

We believe we will look back a few years from now and see that a 4% rate was like buying money at a discount.

Interest rates hovered between 4.5% and 3.75% for the 8-year span of June, 2011 to June 2018

Between January, 2000 and December, 2010 rates were as high as 8.25% and as low as 5.0%.

When looking at the history of interest rates and researching economists’ forecasts, we believe it is reasonable for rates to hit 5% within the next 24 months.

When interest rates increase 1%, a buyer’s monthly payment increases 10%.

So, if rates do go to 5%, it is like an additional 10% price increase for a buyer.

Given all of this information, we believe the biggest risk to a buyer in today’s market is to wait.

Mortgage rates are likely on their way up and there is an opportunity to buy money at a discount today.

Blog • For Buyers • Fun Facts • March 27, 2021

96 Weeks

by Rondi duPont

Mortgage rates have been below 4% for 96 weeks in a row.

Today, the average 30-year fixed mortgage rate sits at 3.17%.

This is 0.5% lower than January and exactly 1.0% lower than March 2020.

Rates recently ended a 31-week streak of being under 3%.

Over the last 5 years, rates have averaged 3.8%.

Most experts believe that rates will continue to creep higher as the year goes on.

Blog • Fun Facts • February 12, 2021

Yes is the Answer

by Rondi duPont

It turns out that ‘yes’ is the answer to the most common questions we hear right now about the market…

Do you think more properties will come on the market this Spring? Yes, the normal pattern in our market is for new listings to be 40% to 70% higher in April versus January. The peak month for new listings is typically June.

Do you think buyer demand will grow even more as time goes on? Yes, for two main reasons. Buyer activity, just like listing activity, increases significantly in the Spring and Summer. Plus, we expect the economy to open up even more as the COVID vaccine gets rolled out over the course of the year.

Do you think interest rates will go up? Yes, all of the trusted forecasters and economists expect rates to be slightly higher by the end of the year. Our own Chief Economist sees rates at 3.07% by year-end.

Do you think prices will keep rising? Yes, because of the simple economic forces of supply and demand. Supply is at historic lows. The number of properties for sale today is roughly 80% below the average. Demand is being fueled not only by the low-interest rates, but also a rebounding local job market that is poised to rebound even more. Plus, the new work-from-home dynamic positions the Front Range as a sought after place to live.

Blog • Economics 101 • For Buyers & Sellers • Fun Facts • January 15, 2021

Rate Heading

by Rondi duPont

Rate Heading

Where are interest rates headed?

This question was one of many which were addressed during our annual Market Forecast yesterday.

Our Chief Economist, Matthew Gardner, provided insight on rates, prices, inventory and many other fascinating topics.

Matthew’s prediction is for rates to creep up to 3.07% by the end of 2021. They are currently at 2.79%.

The image below shows how his prediction compares with predictions of his economist colleagues.

If you would like a recording of the presentation, simply reach out to me or reply to this email.

Blog • For Buyers • Fun Facts • Luxury Real Estate • October 16, 2020

Million Plussing

by Rondi duPont

The luxury market is very active right now. Buyers in the high-end are taking advantage of low interest rates and the equity they have built in their prior homes.

Closings of million-plus single family homes are up significantly along the Front Range.

When compared to this same time last year, sales of properties in this price range are up:

87% in Metro Denver
150% in Larimer County
67% in Weld County

Windermere Real Estate in Colorado recently hosted a private online event for our clients with our very own Chief Economist Matthew Gardner. I would be happy to send you the recording if you would like.

Blog • Fun Facts • September 27, 2020

6 Million

by Rondi duPont

The National real estate market just hit a massive milestone.

Based on the numbers through August, we are now on pace to sell 6 million homes. This is the highest pace we have seen in 14 years.

The 6 million threshold is a big deal in the real estate brokerage world.

Each month, as they have for a long time, the National Association of Realtors tracks the sales and then calculates the annualized rate of residential closings.

For many, many years this number has bounced around 5.5 million. The fact that it just jumped to 6 million speaks to many factors especially the effect of today’s interest rates.

At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.

Economics 101 • Mortgage • January 24, 2020

Rate Forecast

by Rondi duPont

Here is our interest rate Forecast for the next year.

Our Chief Economist, Matthew Gardner, predicts that rates for a 30-year fixed mortgage will stay between 3.8% and 3.9% for 2020.

He doesn’t see rates going above 4.0% until at least the first quarter of 2021.

This is obviously great news for buyers as their payments will stay much lower as compared to having a rate at the long-term average of 7.5%.

If you would like to see the slides from Matthew Gardner’s Forecast presentation, I would be happy to get those in your hands. Just let me know if I can help!