2018 marked a turning point; ending a long standing trend of historically low interest rates, unsustainable lack of inventory and double digit appreciation. When sellers finally joined us in the 2nd half of 2018 to take advantage of the equity they gained... their timing was grossly watered-down by interest rates climbing to rates not seen since 2011. There was also increased talk of the impending recession and loss in the stock market, keeping buyers on the sidelines. So what about 2019. It holds the secret to what will unfold for both the economy and the housing market.
Interest rates hit their peak in November 2018 and began what is now a 2 ½ month slide backwards. The Federal Reserve board served desert at the end of January with Powell’s comments of exercising “patience” as the case for raising rates has weakened. Couple this with the lowest unemployment rate since 1969, increasing minimum wage, and strong labor market; buyers entering the market now have a little more breathing room.
January has proven to be what the doctor ordered. Inventory got a shot in the arm as active listings went up 5.45% from December and 52% year over year. Yep.. that’s a real number.. 52% year over year. This is after December’s 46.76% year over year gain. New listings was the lifeblood with an increase of 109.7% over December and 13.6% year over year. Keeping up with the increase in under contracts of 33.97% over December and 7.24% year over year.
We can only hope this continues as a lack of inventory at the lower price points is still creating a barrier to entry for the first time homebuyer. Key drivers of insufficient housing supply include expensive and lack of land, rising material and labor costs along with state and local regulations. We continue to have less than 1 month of inventory for homes under $400k and less than 2 months for homes priced between $400-500k.
With inventory up.. what’s down is Sold Homes. This should not be a surprise but expected given the circumstances. Let’s consider where we left off the year. Interest rates were at their peak when home shoppers were going out looking at homes. The government shutdown also held back anyone closing with a USDA loan or in a flood zone. The holiday’s also historically slows down casual home buyers who are focused on the end of year activities.
Mortgage purchase applications kicked off the year strong, which is a direct indicator of pending sales. Although we did see the week over week applications go down at the end of January; as was to be expected given Martin Luther King’s Birthday
holiday. There are high expectations for the spring buying season to start now that the Superbowl is behind us.
This is an exciting time to be in Real Estate. As we approach the marking of the longest expansion period in June of this year (120 months); I continue to lean into buyers and sellers sharing the stability and opportunity real estate provides in a changing economy. Expectations of softening house price, appreciation, increasing inventory and continued low mortgage rates should give everyone in the housing market an opportunity to cheer.
Well that wraps up another DMAR Market Trends Commentary. If you are working with buyers who need to get pre-qualified or pre-approved during this exciting market; then make sure to give us a call. We’d love to go to work for you. Nicole Rueth of the Rueth Team, Fairway Mortgage.Watch Current Insight Video
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!
Natalie W. from Idaho Springs, CO
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.
Kathleen Cain from Palmer Lake, CO
Excellent team! Would highly recommend! If I ever have to do this again I would call Nicole Rueth! Her response to any of my questions was answered immediately and with great accuracy! Couldn't have been any better!
Paige M from Morrison, CO
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.