Denver home prices decline for second straight month as mortgage interest rates rise

Dwelling costs in metro Denver, a bellwether for the housing market throughout a lot of the state, declined for the second consecutive month in August as rising rates of interest cooled demand. 

The median value for a house within the space – which incorporates Boulder and Broomfield – was $579,000, down 2.54 % in comparison with July, in response to the most recent report from the Denver Metro Affiliation of Realtors. That’s nonetheless up 8.49 % from a yr in the past.

The pandemic housing increase that pushed costs to data throughout the U.S. could also be drawing to an in depth because the Federal Reserve hikes rates of interest in its struggle in opposition to inflation. Increased borrowing prices make it dearer to make giant purchases, together with houses. That slows demand and, finally, brings down costs. 

The housing market historically slows on the finish of summer time as households flip their consideration towards getting their children again to high school, however officers say this yr’s slowdown feels extra pronounced.

“Rates of interest are nonetheless the largest issue of their influence on purchaser demand as it’s a direct correlation to month-to-month funds,” stated Andrew Abrams, a Denver realtor and chair of the affiliation’s market traits committee, within the report. “With a lot instability within the financial system and the world as an entire, it’s troublesome to forecast how the housing financial system will probably be impacted.

Value cuts are on the rise, and homes are taking longer to promote, in response to the report. A single-family house sat available on the market for about 12 days in August, greater than double the time it took to promote an analogous home a yr in the past. And fewer offers are getting performed, with the variety of closed gross sales down 30 % from final yr. 

The sluggish gross sales imply the variety of energetic listings are up from final yr, giving supply-starved patrons extra to select from. However which may not final lengthy as those that locked in low mortgage charges throughout the previous two years will probably be much less inquisitive about shifting so long as rates of interest are rising.