The Denver market remains unpredictable and continues to buck all seasonal trends. This July, the number of closed homes was down 16% as compared to last year. This drop off in closes can primarily be attributed to high interest rates, a lack of inventory, and high home prices.
The Federal Reserve raised the Fed Funds Rate another 0.25% to 5.50%. Meanwhile, the 30-year mortgage rates saw a lot of volatility throughout the month, but ended the month at 7.04%. These high rates continue to keep the number of new listings low — new listings were down 15.33% month-over-month, and 24.76% from this time last year. Would-be sellers are not willing to give up their existing low mortgage rates: currently, 91.8% of mortgagors in the U.S. are paying under six percent interest on their loans — and 82.4% are paying under five percent.
Conversely, active listings at month’s end were up 3.76% month-over-month for a total of 6,299 listings, a small uptick in inventory. However, the Denver market as a whole is still facing a drastic lack of inventory, as on average, Julys tend to end with over 15K active listings.
While demand is slowing, we are still in a seller’s market for most price points; however, in the markets for homes priced under $299,999 and over $1.5 million buyers continue to maintain an advantage. Furthermore, seller concessions marketwide increased from 29% last June to 48% this June with an average concession of $7,295, meaning buyers at all price points continue to maintain some negotiating power at the moment.
Average close price remained on par with last year, so though we may have seen fewer closings this year we are not seeing significant decreases in value. And we may yet see a pickup in closings come fall, as the Denver market typically slows down in July and August and experiences a rebound in September. This year has not followed any trends, however, so it remains to be seen what the fall has in store for us.