The Denver-metro housing market made a weak showing in July, due to three factors: high mortgage rates, high home prices and tight inventory.
That’s according to the latest Denver Metro Association of Realtors (DMAR) report, which called the convergence of these factors a “trifecta of headwinds perpetuating the housing affordability crisis.”
New listings for single-family homes dropped 15.33% from June to July, to 4,773. That’s a nearly 25% drop from last July. This tight inventory, however, did not result in higher prices. The average close price actually decreased 2.43% from June to July, to $693,449 (versus June’s 710,719).
Experts attribute the low inventory, in part, to high mortgage interest rates. “Would-be buyers and sellers are weighing the ‘golden handcuff’ dilemma,” writes Chair of the DMAR Market Trends Committee Libby Levinson-Katz in the monthly report. “They love their historically low interest rates on their home,” even though they might no longer love their home.
Notes the report: “Moving becomes downright unattractive for many homeowners who purchased or refinanced between 2020 and mid-2022 and locked into a mortgage interest rate around three percent.”
In fact, the DMAR report adds, homeowners who stated they had mortgage rates higher than 5% as of June 2023 were almost twice as likely to be planning to sell their homes in the next three years than those with lower rates.
Those who go ahead and list their homes often find it necessary to be more accommodating to buyers. Last June, for example, 29.2% of sellers made concessions for buyers, while this June, 48% did the same, to the tune of an average $7,295.
That’s good news for those with the means to purchase. “This may be the best time to buy in recent history as buyers can finally negotiate after enduring years of a strong seller’s market,” notes Levinson-Katz.
In all, though, the market “remains unpredictable,” she reports.