Colorado may be freezing cold, but the real estate market is hot. We don’t usually see the market heat up like this until late March or early April. With the faster than expected increase of mortgage rates, many thought the market would slow down a bit – after all that’s what typically happens when mortgage rates.  

Buyers Are Anticipating Higher List Prices

Even though mortgage rates rose in the last week, homebuyers know the .75% increase will not make a massive difference in the buyer’s monthly payment. Homebuyers have sat by and watched as home values have increased upwards of 20% in the last year. They cannot afford to wait any longer and risk another massive spike in home values. As you can see with Denver Real Estate Trends, buyers are still out there, and they are buying at or above list price.  

What Do Rising Rates Mean For First Time Home Buyers?

First time home buyers are not putting off their plans to buy a home due to the rising interest rates. If anything, the rising rates have caused them to get moving more quickly. Some first time home buyers have changed their price point to adjust to allow for the small increase in monthly payment due to a higher mortgage rate.

It is really important to remember even though rates have increased, they are still close to historic lows. The rates in 2018 were much higher than we are seeing now, and the real estate market has gained strength since then. Previous Rates show how slight this recent jump in rates is in the grand scheme of things.  

Colorado Real Estate Inventory Is Still Really Low

Something else to recognize is that Colorado’s real estate inventory is extremely low – in some areas, it is the lowest it has ever been. This allows sellers to be aggressive in pricing and when it comes to negotiations. Most homes are selling at least 6% above list price, primarily due to the lack of inventory.  

Usually, when rates rise, buyers get scared away, which causes inventory to grow – but as we said, the market is not the same as normal. However, we are hopeful that inventory will increase through June, making things a little easier for buyers.

Have More Questions?

If you know you want to buy a home but are confused by all this news – that’s okay! We are here to help. We can show you how much your monthly mortgage payment will be based on the price point you’re interested in, and once you get the process started, we can lock in a mortgage rate so you won’t be surprised in the event of a rate increase in the middle of your home search.

Give us a call to get started! We’ve Got You Covered!