Over the last several weeks we’ve heard a lot of news about lower interest rates motivating buyers to look for a new home.
In the analysis below, Joe Massey with Castle & Cooke Mortgage provides some excellent talking points for first time buyers as well as trade-up buyers. Despite continued home price appreciation, the monthly mortgage payment of buying a home this year is actually less than a comparable home last year due to lower interest rates.
If you haven’t seen the news lately, you might have missed two important factors in the Denver real estate market right now.
Interest rates have been decreasing recently reaching a 21 month low in the most recent survey completed June 7th at an average of 3.86% for a 30 year fixed.
Inventory is at a 6 year high with more than 8700 new listings in the month of May.
These two situations combined are making for a great opportunity for buyers to get off the fence and purchase now.
These two situations combined are making for a great opportunity for buyers to get off the fence and purchase now. For a quick comparison on how this can impact your buyers, let’s look at what it was like to purchase a home in June of 2018 vs. June of 2019:
SFR Median Price = $451,500
FHLMC Average Interest Rate = 4.62%
Average P&I Payment = $1853
SFR Median Price = $470,000
FHLMC Average Interest Rate = 3.82%
Average P&I Payment = $1756
So the median monthly payment for a home in Denver has gone DOWN by $100 over the last 12 months.
This is a terrific opportunity for your buyers to get off the fence and purchase a home for a smaller payment than they would have had last year. Combine that financial opportunity with the increased inventory which may allow your buyers to get a price reduction and/or seller concessions. This is the best opportunity that buyers have had in the last several years.
Tell Your Buyers
Make sure you are sharing this with your first time buyers as well as your trade-up buyers. This is a fantastic time to purchase properties and you want to make sure you are making your FORD calls and getting the word out.