colorado realtors hope interest rate cut jumpstarts lackluster market
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By Sara B. Hansen | Published on September 20, 2024
After a slower-than-average summer homebuying season, Colorado realtors hope this week’s interest rate cut will motivate potential homebuyers to seek their dream homes.
“Our market waits for the rate drops and most believe that if and when they occur, buyers who have been waiting on the sidelines will influence the supply and demand and jumpstart our lackluster market,” said Boulder-Broomfield-area realtor Kelly Moye.
According to the August Market Trends Housing Report from the Colorado Association of Realtors, with more than 27,000 active listings statewide, and more than half of them sitting in the seven-county Denver metro region, potential buyers had 21% more inventory to choose from last month than they did a year ago.
The months’ supply of inventory in August statewide is 3.9 months, while it is 3.6 months in the Denver area. Both are up more than 30% from a year ago. Average days on market climbed 22% from 41 last year to 50 in August.
Statewide, the $584,000 median price tag for a single-family home is up 0.7% from $580,000 a year ago. Meanwhile, condo-townhome pricing fell nearly 6% from a year ago to $405,000 from $430,000.
In August, sold listings statewide dropped nearly 6% to 7,869 from 8,351 a year ago.
The percent of list price received was 98.6%, down from 99% last year.
“Many pundits are predicting a surge in buyer traffic in the fourth quarter of this year,” said Fort Collins-area realtor Chris Hardy.
“If that’s truly the case, buyers contemplating a purchase should act now while there’s many homes available for sale and sellers are open to negotiations like price reductions, temporary interest rate buy-down concessions, and various repairs and improvements discovered during inspections.”
On Wednesday, the Federal Reserve cut interest rates by a half percentage point after a year of keeping borrowing costs at their highest level in more than two decades. This is the first time the Fed has cut interest rates since 2020.
Some experts speculate a rate change may not immediately change mortgage rates because the mortgage market has already incorporated the Fed’s widely anticipated cut.
Mortgage rates have dropped over the past few months, with the average rate on a 30-year loan falling from 7.09 percent in July to 6.3 percent by early September, according to Bankrate. The drop from 8 percent in October 2023 occurred without any changes in Fed policy.
But interest rates are just one piece of the puzzle affecting mortgage payments.
“Buyers continue to have a tough time accepting today’s higher mortgage payments which, coupled with higher interest rates, higher insurance, and higher taxes, are taking a large bite out of the budget of our would-be homeowners,” said Aurora-area realtor Sunny Banka.