No Rest for the Weary
November’s DMAR report highlighting October data reflects just how important the home has become by producing nearly as many records as we saw in last month’s report. Most notably is what is happening in the attached single-family category.
Looking to purchase your first home? Move into that perfect dream house? The market momentum is making it harder, and the broader economics will not make it any easier. Let’s start with DMAR specific numbers, then jump into how the broader economics might keep the Denver trend from waning.
For those looking to sell their detached single-family home, there has never been a better time than now! For those looking to buy, be ready to go all in. This is not the time to low ball or sleep on it. If you find a house and it’s the one, make your best offer quickly because next month it will cost more. Here are the most impactful highlights:
Bottom line: Sellers, your homes are in HIGH demand, and you will get top dollar for them. Buyers, get aggressive for the one you love; with these low interest rates and continued appreciation, you will not lose.
If you are in the attached market, the odds of your offer being selected are a little better. Ready to make an offer? As a buyer, you are paying 99.76 percent of the list price; have 1.33 months of inventory and nine days to make a decision. Prices are also going up slower than detached with average prices up 7.86 percent, and median price up 9.85 percent. First time home buyers, this is your opportunity. Long term, this purchase could be an incredible first investment.
What’s going on beyond the housing market to sustain this momentum?
COVID-19 cases are spiking worldwide. London was the latest to activate a four-week shutdown of all non-essential businesses. Ireland, Germany, Austria, Italy, Greece, among others, are announcing new measures to try to slow down the spread. This uncertainty will result in an even greater importance of home and keep long-term mortgage rates low for the foreseeable future.
The Federal Reserve started buying 1.5 percent Mortgage-Backed Securities Coupons. These coupons have been trading for some time, but now the Fed is putting their money behind it. As the largest liquidity source for new MBS originations, where the Fed puts their money the market goes. This does not mean we will see rates as low as 1.5 percent, but it does allow for lenders to generate profitability at lower, long term rates. So again, paving the way to sustainable lower rates.
The economy continues to show its resilience. Third quarter 2020 GDP came out exactly where it was expected at 7.4 percent or 33.1 percent annualized. This recovered two-thirds of second quarter GDP loss. Inflation was also muted up only .2 percent month over month, incomes rose .9 percent month over month, and the personal savings rates were up 14.8 percent for the third quarter. This will provide strength as the second wave of shut downs begin to take place.
Forbearances ticked up, but extended regulations protect those who opted. As of October 27th, new forbearance activations went down 7 percent month-over-month; while re-activations were up 50 percent, bringing all forbearances up 15 percent. The majority of increased forebearance was in the FHA/VA category because Ginnie Mae extended the activation period from October to the end of the year. Homeowners can now protect their homes through 2021, putting off foreclosures and any chance of the depreciation that plagued 2008.
Home prices will continue to rise.
Hopefully, not this fast for long, but they will keep going up. Why? Because demographics and low interest rates will continue to spike demand. Mortgage Interest Rates ended October at 2.81 percent with mortgage purchase applications continuing a six-month double-digit growth. 2020 will end with record volumes in sales and mortgage originations.
Now is not the time to sit on the sidelines in fear that the bubble will burst; it is the time to stay engaged. Finding the right home might be challenging, but waiting will only cost you more.
Your champion in building wealth through real estate,
Producing Branch Manager with The Rueth Team of Fairway Mortgage
The Rueth Team is dedicated to our clients success. It is this driving mission that keeps our team constantly learning and pushing beyond our boundaries. We find the solutions other lenders simply can’t (or won’t). We make a commitment to each borrower, fulfilling it with hard work, constant communication and creative problem solving. When a referral partner gives our name, they are confident knowing they are giving their clients the best chance of a smooth, successful experience.Learn More
NO OBLIGATION TRAINING: Market Mastery & “Done for You” Marketing tools delivered every 3rd Thursday (occasionally Tues) of the Month so you MAKE MORE MONEY! Nicole Rueth with Fairway Independent Mortgage Corporation, together w/ guest speakers from a range of professional disciplines, will be presenting monthly updates on industry statistics and market news you can use to help educate and motivate your buyers and sellers. Walk away with talking points, slides & information to set yourself up as an industry expert.
Alison P. from Wheat Ridge, CO
Nicole was wonderful to work with! The experience was so much better and more personal than working with a large company where you might not have contact with the same person throughout the process. Nicole was extremely communicative, easy to reach and talk to, and went out of her way to make this the most positive experience for my family. She worked so hard to meet our tight deadlines and made the entire experience smooth and stress free. I would 100% recommend working with Nicole and the Rueth Team!
stacieandtomwedding from Denver, CO
Nicole and her team were responsive, professional, and supportive as they walked us through every step of the loan process. We highly recommend the Rueth Team and will reach out to them with any future needs!
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We’ve used The Rueth team twice now and have had a seamless experience both times. She and her team are knowledgeable, friendly and helpful. When I contact them they are very quick to respond. I would continue to work with The Rueth team in the future!
Shelby from Denver, CO
I used Fairway and Rueth’s team when purchasing a home recently and they were outstanding throughout the entire process. One of the staff on the team was even out on leave for most of the process and you wouldn’t have even noticed. Everyone I worked with provided very friendly, personable and knowledgeable service. I knew what my options were and everything was done in a very timely fashion. They even were able to find me some closing clost assistance so that I was able to have some money in my pocket left at close to do some work on the house. This was the third home I’ve bought and Rueth’s team was by far the best mortgage company I’ve worked with and I would recommend them with my full confidence.
Andrew C. from Wheat Ridge, CO
Nicole was fantastic to work with. She's responsive, knowledgeable, and able to make last minute changes when necessary. Working with her was a nice change from big-box mortgage companies. When last minute things needed to be fixed she did them promptly, and made sure we made it to closing without a hitch!
Mr. and Mrs. Walls from Idaho Springs, CO
We were impressed with the professional, personable service we received from Nicole and would recommend her to other home buyers. She helped us get pre-qualified quickly, making our search more productive.
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Nicole and her team did an amazing job not only in keeping me informed of all the processes that go into selling and buying a home, but they were professional and knowledgeable! They answered all my questions, and made it easy to understand! I will never use anyone else!
april3lynz from Colorado Springs, CO
Absolutely AMAZING group! I had a really rocky start with my home buying experience. I had a horrible realtor and I was going to go through a different lender. I dropped my horrible agent and found an amazing realtor who was just phenomenal, and she referred me to The Rueth Team. My experience with them was quick, painless and simply amazing. I had very little stress and their team was so helpful. I had a moment of panic and I called, they were able to explain everything to me without confusing me more and went over every detail of my process moving forward with me. They had no hidden fees and were straight up and up front with me the whole way. I'm extremely grateful to them. In less than a month I am moving into my new home!!
Jeff D. from Denver, CO
I've closed two mortgages prior to this one with The Rueth Team, and this was by far the smoothest lending process I've had. Nicole, Peter, Emily, and Robbin were terrific communicators, provided me with honest feedback, and were simply easy to work with. They're true professionals and I'd happily work with then again on my next loan.