Navigating Denver Real Estate: Interest Rates and Inventory

by | Feb 26, 2024 | Real Estate Market Reports | 0 comments

Navigating Denver real estate can be like riding a rollercoaster. In the ever-changing landscape of Denver’s real estate market, one thing remains certain: the complexity of supply, demand, and interest rates affect home buyers and home sellers.

Statistics and the experiences of buyers and sellers confirm that Denver and other markets are a rollercoaster ride affected by so many factors.

Navigating Denver Real Estate

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Fourth Quarter 2023 and 2024 Projections

In the fourth quarter of 2023, Denver witnessed a significant downturn in sales as interest rates soared to an unaffordable 8%. Prospective buyers faced higher mortgage payments, resulting in concerns about purchasing affordability.

Home Affordability and Rising Prices

The rise in interest rates was a shocking reminder of affordability in managing the rising prices of groceries, gasoline, and other consumer goods.

Then, in January 2024, interest rates dipped. Suddenly, buyers flooded the market to take advantage of the effect of interest rates on lower monthly mortgage payments.

This rush to buy highlights the fact that home buying is driven by affordability, not just the price of homes. For the past several years, the Denver metro area has experienced low inventory and soaring prices.

Many buyers bid over and above the list price of homes—although, at the time, interest rates were lower.

With limited options due to homes on the market and home values continuing to grow, buyers are limited in their ability to afford a home and financially qualify.

Home Buyers Are Watching Interest Rates Closely

As a result, many buyers are hoping for interest rate decreases so that mortgage payments become more manageable.

Looking ahead to the remaining months of 2024, it is likely the trend of buyers rushing if or when interest rates drop will continue.

Forecasts suggest that interest rates will likely hover from 6.5% to 7.0%. Additionally, low inventory levels are expected to persist, increasing the importance of strategic timing for home buyers and sellers.

Wait? Buy?  Sell?

Considering these projections now is the time to act for those needing a home. Waiting may mean facing higher prices and less favorable interest rates down the line.

On the other hand, for those thinking of selling, spring and summer represent the high buying times of the year. With a high buyer demand and limited inventory, home sellers can benefit.

Navigating Denver real estate, like many other major markets, is affected by interest rates, inventory levels, and buyer behavior.

While the months ahead present challenges, those able to time the market buyers may end up with the home of their dreams, and sellers may end up with more money in their bank accounts. Uncertain times make the decision to buy or sell all the more critical, specifically choosing an experienced realtor with the skills to negotiate for you.

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The Sam Wilson Home Selling Team specializes in homes in the Denver Metro area, including Arvada, Aspen Park, Aurora, Brighton, Broomfield, Centennial, Conifer, Denver, Edgewater, Evergreen, Genesee, Golden, Highlands Ranch, Idledale, Indian Hills, Ken Caryl, Kittredge, Lakeside, Lakewood, Littleton, Morrison, Mountain View, Parker, West Pleasant View, Westminster, and Wheat Ridge.

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