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

September 2024 | Denver Housing Market Update 🏠

22 Sept 2024 · 1 min

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1:26

In this September 2024 market commentary, the speaker explains that the Federal Reserve cut the Fed funds rate by 50 basis points—the first cut since 2020—highlighting the close correlation between the Fed rate and mortgage rates. While mortgage rates have not fallen by the full half‑percentage point, they have been trending downward over the past two weeks, with conventional loan rates locking under 6% and FHA loans under 5%, which is expected to release pent‑up buyer demand. The speaker notes that single‑family home prices are up about 1% year‑over‑year, whereas condo and townhouse prices have declined roughly 6%. Active home supply has slipped slightly, a seasonal effect as the market moves into the fall, but new listings and pending sales have risen compared to the prior month and year, indicating an early‑season heating. Current market metrics show an average of 36 days on market and a showings‑to‑pending ratio of about 14, both of which are projected to improve (decrease) as the fourth quarter progresses.

Chapters

The Federal Reserve reduced the Fed funds rate by 50 basis points this week, and it was the first reduction since 2020. Now, this doesn't mean that mortgage interest rates dropped by half a percentage, but mortgage rates and the Fed funds rate have a close correlation. Mortgage interest rates are strongly impacted by mortgage-backed securities, and investors that trade these stocks and bonds have already been anticipating that the Fed would reduce rates. So we've been seeing movements in the mortgage interest rates for the last 2 weeks, and those rates have been coming down. I'm seeing conventional loans getting locked in at under 6% and FHA loans that are coming in under 5%, which is going to start shaking loose some of this pent-up buyer demand. The average price for single-family homes increased by about 1% from 2023, and condo and townhouse prices dropped by about 6%. Our active supply of homes was down slightly from the previous month, which is expected as we get into the fall selling season and as demand starts to heat up. New listings and pending sales were both up from the previous month and year, and we can see that our fall is starting to heat up a little earlier than usual. Our average days on market is at 36 days, and our average showings to pending is at about 14, but I think both of these numbers are going to start going down as we get further into the 4th quarter.