Michael RushReal Estate Broker, Keller Williams Realty DTC · Real Estate Broker at Keller Williams Realty DTC

Have Inflation and Mortgage Interest Rates Peaked!? 🏘️ | December 2022 Colorado Housing Update

6 Dec 2022 · 3 min

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2:31

In this December 2022 market briefing for the greater Denver area, the speaker reviews recent housing data and offers a forward‑looking outlook. New home listings have fallen 30.7% year‑over‑year as sellers wait for a more favorable 2023 market. Buyer demand is also down over 30% YoY, driven by higher mortgage rates and seasonal hesitation. The median closed‑price‑to‑list ratio slipped 3.3% to 98.4%, indicating a shift toward a more balanced market, while days on market rose to 33 days. National mortgage rates have eased from 7.2% to 6.2%, mortgage applications are up 4%, and price reductions have fallen to 6% from over 7%. The speaker interprets these trends as a sign that the housing bubble is receding and predicts a healthier, less overheated market in 2023, with opportunities for buyers to purchase now and refinance later, and for sellers to benefit from a spring‑time surge in competition.

Chapters

Are the housing bubble fears finally behind us? Let's dig into some hot-off-the-press December stats to help guide us. New listings are down 30.7% year over year as sellers wait until 2023 in a better market to list their homes. Demand is down over 30% year over year Because of higher interest rates and because of seasonality as buyers wait for better interest rate environment. Our percent of closed price to list prices decreased 3.3% year over year to 98.4% here in the greater Denver area. This is much needed for our buyers and is going to continue to do so as we find out what the Fed decides to do on their meeting on December 14th. Days on market has increased to 33 days, which is quite a spike from last year. But realistically, it's more of a balanced market and it's what we expected to happen. Now, there's going to be a lot more information that we receive after the Fed meeting on December 14th, and we're going to be able to see more of that light at the end of the tunnel. But I still think there's good news to come. It's going to be a great environment for buyers further into 2023 as rates come down, but there's going to be more competition. So personally, like I've been saying, I would buy now, refinance in 6 or 7 months when those rates are lower. Now for sellers, I think honestly it's going to be an awesome environment for you in 2023 as we reach kind of that early spring selling season that we've been seeing the last couple years, and as competition increases from those reduction in rates. We saw the mortgage market rally with rates decreasing from 7.2% to 6.2% as a national average. Now we saw mortgage applications increase 4% and home price reductions Reduced to 6% from over 7%. So this just shows you a little glimpse of what is going to happen as we get into a better rate environment as well, because remember, we are still low on inventory on the grand scheme of things. We've just had an influx of inventory due to seasonality and due to the spike in interest rates. I think there's light at the end of the tunnel and we're going to see a, a great market in 2023, not as ridiculous and 20% appreciation, but a healthier market.