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.
The following analysis of the Metro Denver & Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere real estate agent.
ECONOMIC OVERVIEW
Colorado’s economy picked up, adding 64,900 new non-agricultural jobs over the past 12 months — a growth rate of 2.4%. Over the past three months, the state added an impressive 28,300 new jobs.
In August, the state unemployment rate was 2.8%, down from 3.4% a year ago. Unemployment rates in all the counties contained in this report were lower than a year ago. It is fair to say that all markets are now at full employment.
HOME SALES
HOME PRICES
DAYS ON MARKET
CONCLUSIONS
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
For the third quarter of 2019, I continue the trend I started last summer and have moved the needle a little more in favor of buyers. I continue to closely monitor listing activity to see if we get any major bumps above the traditional increase because that may further slow home price growth. However, the trend for 2019 will continue to be a move toward a more balanced market.
ABOUT MATTHEW GARDNER
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
All about new 
homes…
Nationally, sales of new homes are up 3% over last year and are running at an annualized pace of 697,000 homes.
To put that in perspective, in April 2011 the annual pace was 310,000 homes and in April 2005 it was 1,260,000.
So, nationally, new home starts are roughly double what they were at their lowest point in recent history and roughly half of what there were at their highest point.
How about locally?
According to our friends at Metrostudy, sales of new homes along the Front Range are up 20% over last year.
Front Range builders have had 28 consecutive quarters of new home start increases and are now building a similar amount of new homes as compared to 2007.
So, the new home market is strong but there is no indication of builders over-supplying the market.
The results are in from FHFA.gov’s latest ranking of the top performing markets in the U.S.
Each quarter they track 245 cities across the country and rank their real estate markets by home price appreciation.
What’s the highest performing city the the U.S.
Vegas! Their prices have gone up 17.63% in the last year.
How about the worst?
Bloomington, Illinois sits in dead last where prices went down 3.58%
Here’s how Colorado cities are ranked:
• #10 Colo. Springs = 11.41%
• #16 Greeley = 10.68%
• #59 Fort Collins = 8.29%
• #64 Denver = 8.15%
• #97 Boulder = 6.85%
If you missed our Annual Forecast Review last month, click the link below to get a recap of the event:
This past Wednesday and Thursday evenings we had the pleasure of hosting our annual Market Forecast events in Denver and Fort Collins.
Thank you to the 700 people who attended both events. We appreciate your support!
In case you missed the events, here are some highlights including our forecast for price appreciation in 2019:
• In 2018 Prices went up:
o 8% in Fort Collins
o 8% in Loveland
o 8.5% in Greeley
o 8% in Metro Denver
• Inventory is (finally) showing signs of increasing:
o Up 25% in Northern Colorado
o Up 45% in Metro Denver
• There are distinct differences in months of inventory across different price ranges = opportunity for the move up buyer.
• There are several reasons why we don’t see a housing bubble forming:
o New home starts along the Front Range are roughly 60% of pre-bubble highs 14 years ago.
o Americans have more equity in their homes than ever, $6 Trillion!
o The average FICO score of home buyers is significantly higher than the long-term average.
o The home ownership rate is back to the long-term average.
• Our 2019 Price Appreciation Forecast:
o 6% in Fort Collins
o 6% in Loveland
o 7% in Greeley
o 6% in Metro Denver
If you would like a copy of the presentation, go ahead and reach out to me. I would be happy to put it in your hands!
One of the most common questions we hear from clients is “Where do you think interest rates are going?”
Virtually all of the experts we follow put rates above 5% going into next year and some see rates approaching 5.5% by the middle of 2019. What’s certain is that there are economic forces at work that are pushing rates higher.
So, how about a little history lesson? How do today’s 30- year mortgage rates compare to this same date in history going all the way back to 1990?
• Today = 4.85%
• 2017 = 3.94%
• 2015 = 3.82%
• 2010 = 4.27%
• 2005 = 5.98%
• 2000 = 7.84%
• 1995 = 7.75%
• 1990 = 10.22%
While today’s rates feel high only because they are higher than 2017, they are quite a bit lower than at many times in history.
It’s true, certain parts of our market are cooling off. We are seeing fewer multiple offers, fewer bidding wars, and fewer inspection concessions.
However, homes that are priced right and in great condition are selling, and in many cases, selling quickly.
As buyers feel the market cool a bit, it may cause them to want to wait. They sometimes feel like it’s a better choice to ‘wait and see what happens.’
The reality is, there is a real cost to waiting given two specific facts.
1. Interest rates will continue to rise
2. Prices will continue to rise
Interest rates are a little more than 0.5% higher than a year ago and experts predict them to be another 0.5% higher by this time next year.
Prices have been appreciating at roughly 10% per year for the last four years. Based on the numbers, we see that appreciation could be 5% per year for the next two years.
So, let’s look at a house priced at $450,000 today. If prices go up “only” 5% for the next 12 months, that home will cost $22,500 more in a year.
And, if rates go up another half percent, the monthly payment will be $206 higher. That’s an 11% increase!
In an environment of rising prices and rising rates, there is a real cost to “wait and see.”
The following analysis of the Metro Denver & Northern Colorado real estate market (which now includes Clear Creek, Gilpin, and Park Counties) is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere agent.
ECONOMIC OVERVIEW
Colorado continues to see very strong job growth, adding 72,800 non-agricultural jobs over the past 12 months—an impressive increase of 2.7%. Through the first five months of 2018, the state added an average of 7,300 new jobs per month. I expect this growth to continue through the remainder of the year, resulting in about 80,000 new jobs in 2018.
In May, the state unemployment rate was 2.8%. This is slightly above the 2.6% we saw a year ago but still represents a remarkably low level. Unemployment remains either stable or is dropping in all the markets contained in this report, with the lowest reported rates in Fort Collins and Boulder, where just 2.2% of the labor force was actively looking for work. The highest unemployment rate was in Grand Junction, which came in at 3.1%.
HOME SALES ACTIVITY
HOME PRICES
DAYS ON MARKET
CONCLUSIONS
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
For the second quarter of 2018, I have moved the needle very slightly towards buyers as a few counties actually saw inventories rise. However, while I expect to see listings increase in the coming months, for now, the housing market continues to heavily favor sellers.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.
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