Market Update, May 11, 2023

Affordability is top of mind for buyers right now. Fluctuating interest rates, rising home prices, and increased valuations that have led to higher property taxes all weigh on buyers’ minds when they consider purchasing a home.

The Guardian published an excellent article titled “How finding a home in America became so absurdly expensive.” Historically, home prices have been considered affordable when the median home price in an area was about 2.6 times the median income. However, in Denver, in 2022, the median home price was 7.1 times the median income. In Boulder, the median home cost 8.7 times more than the median income.

How did home prices get so high?

Prices have risen for complex reasons, but The Guardian explains high prices the same way we describe the situation to our clients. First, there aren’t enough homes for sale to satisfy demand. Construction is down, and there is a need for more homes. Millennials want to buy homes, are entering their prime home-buying years, and are the largest generation alive

Investors have also been scooping up many homes, putting upward pressure on prices. They bought 18.4% of all homes sold in the fourth quarter of last year. 

There’s some disagreement about the extent of the problem, but many analysts say baby boomers are aging in place and not selling their homes, which puts a strain on the market and limits buyers’ choices.

Young and first-time home buyers suffer the most, primarily because they don’t have the down payment to purchase a home and often don’t earn enough to cover the monthly payments and maintenance costs of owning a home. As a result, they’re renting with roommates and moving in with their parents.

What can buyers do?

Despite the difficulties, there are ways to make home-buying less expensive. For example, Colorado’s CHFA program offers down-payment assistance through grants that don’t need to be paid back. In addition, Front Range Heroes provides rebates for homebuyers who are healthcare workers, veterans and active-duty military members, educators, and first responders. We also recommend that borrowers talk to multiple mortgage lenders to find the most affordable loan possible.

Buyers should do everything possible to boost their credit scores before purchasing, too, which results in a better interest rate.

Questions about how to get the best deal when you buy?

Contact us now for expert guidance. Call 720-782-2468 or schedule a time for us to call you.

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During the last week:
New Listings – 1477
Back On Market – 253
Price Increase – 103
Price Decrease – 1029
Pending – 1534
Withdrawn – 110
Closed – 1095
Expired – 132

Previous Week:
New Listings – 1545
Back On Market – 205
Price Increase – 178
Price Decrease – 1006
Pending – 1539
Withdrawn – 142
Closed – 1567
Expired – 339

Based on data from REColorado®

“Tom and Dave were absolutely amazing through our entire home buying process. They were honest and trustworthy, extremely quick to get back to us whenever we had any questions, and definitely got us the best bang for our buck. We have already recommended them to several of our friends, absolutely love these guys!!”
– Timothy S. and Christiana K., Lakewood

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