as denver’s real estate market cools, mortgage rates top 7% for the first time since 2002
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By Kyle Harris | Published on October 27, 2022
Potential Denver home buyers have another dose of bad medicine to swallow: Interest rates are continuing to climb, making homeownership an even tougher prospect.
The 30-year fixed-rate mortgage peaked over 7% for the first time since April of 2002, according to Sam Khater, mortgage company Freddie Mac’s Chief Economist.
“As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month,” Khater explained in a statement. “In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”
This national trend is playing out in the Denver market, where realtor Carrol Rhead, of CVJ Real Estate, has seen potential buyers and sellers decide to stay put for the time being and enjoy the holidays.
“A lot of people are thinking, ‘Well, let’s take time for the dust to settle and wait for spring,'” she said.
The market, however, is working somewhat in favor of buyers this year unlike in 2021.
When it comes to negotiating with sellers, buyers have more options than they did last year. They can request more time for inspections and negotiate prices after appraisals. They no longer have to buy sight unseen and can think about where they’re moving. And they aren’t competing with others who can afford to pay $100,000 over the asking price in cash.
Were buyers in a better position last year, when the market was more competitive, or this year, with sky-high mortgage rates?
As Rhead tells it, “Buyers are screwed either way.”
But she’s not totally hopeless. Still, some people are finding homes in the Denver area, and she’s eager to help them.
She recently worked with a client who had to downsize his expectations for the size and quality of home he was buying.
Instead of picking a single-family home, he looked for a townhouse, and he’s currently under contract.
“He is very excited,” Rhead said. “I think he’s got the remorse of, ‘Darn it, I should have bought 10 years ago, kind of thing, and just doesn’t want to be in that position any longer. Looking backwards, you know, the best time to buy is always today, if you couldn’t do it yesterday.”