The Denver Real Estate Market in January 2022
The Denver real estate market in January was another tough month for already fatigued buyers. Offers that got buyers to the closing table sometimes went over the asking price and included limited to no inspection requests along with appraisal gap language.
With our record-low inventory and interest rates already on the rise, perfect homes in ideal locations are getting a lot of attention leading to buyers putting it all on the line to secure the deal and end their house hunting journey.
Looking at the data, there were 3,479 new listings in January compared to 2,655 in December. However, just 2,847 homes closed which is a decrease of 40.1% month-over-month and 11.8% year-over-year.
As for average home prices, they're up by double digits when looking at year-over-year figures. Comparing January to December, detached, single-family home prices actually dipped from $705,753 to $689,711 while attached listings increased a bit from $440,734 to $450,244.
If you're hunting for a detached home, this goes to show that there are still gems out there to be found and strategies that can be used to prevent you from overpaying or putting yourself at a disadvantage by waving inspections. The key is working with a real estate agent who truly understands the Denver market and knows how to guide clients successfully.
By the close of the month, there were just 1,184 active listings—788 detached homes and 396 attached properties. Just how low is this? Looking at data from 1985-2021, the average is 12,732 active listings, so the market is incredibly tight. That's also down a massive 48.9% year-over-year, even 19.8% month-over-month (the second-largest decrease on record).
One bright spot for buyers is news that the Federal Housing Finance Agency raised 2022's conforming loan limits for mortgages backed by Fannie Mae and Freddie Mac in the U.S. Here in the Denver metro area, the limit increased to $684,250 which is higher than the cap for most counties in the country.
This increase gives buyers access to larger lines of credit to purchase a home using a conventional loan instead of opting for a jumbo loan that comes with all kinds of hoops to jump through, stricter qualifications and higher mortgage rates.
To view our report on Denver real estate market stats for January, click here.
Mortgage Payments & Interest Rates
Did you know? The Federal Reserve is planning to curb rising inflation by pushing interest rates higher in 2022.
Lawrence Yun, Chief Economist and VP of Research at the National Association of Realtors, predicts that 30-year fixed mortgage rates could increase to 3.7% by the end of 2022–other forecasters predict as high as 4% which corresponds with the pre-pandemic rate.
When buying a home, your loan principal and interest payments will change depending on the interest rate you lock in with your lender. A quick example—you buy a home for $500,000 and put down 20% or $100,000. You then secure a 30-year loan for the balance of $400,000.
At 3% interest, your base monthly mortgage payment will be $1,686. If rates go up just one percentage point, you'll pay $1,910. That's an extra $224 a month which can be significant for some buyers.
Take a look at the chart below for more numbers, you can also download a PDF to keep handy.