The Denver Real Estate Market in April 2022
Another 6,881 new listings (attached and detached) came on the Denver real estate market in April. Added to the 2,221 active listings still available at the close of March, buyers had a pool of over 9,000 homes to choose from last month.
Looking specifically at detached single-family homes, there were a whopping 5,023 new listings in April, a month-over-month increase of about 16%. By the end of the month, there were 2,445 active listings still available—up 50.3% compared to March and 49.1% over the prior year. If this continues, we could potentially see things start to finally balance out for buyers.
However, rising interest rates—and therefore mortgage rates—remain the big X factor in the market. More inventory is likely due to homeowners looking to sell before potential buyers are priced out. And many buyers are just as eager to purchase a home before rates climb any higher.
This rush has led to increased prices and reduced days on market.
Detached homes reached an average price of $825,073. That's a month-over-month increase of 3.9% and 18.5% higher than in 2021. Buyers are coming in with their strongest and best offers, and homes are now going for 107.3% of their listing price.
Detached homes also spent just 9 days on the market, down 10% year-over-year and 18.2% compared to March.
As for attached homes, prices dipped by less than a percentage point month-over-month, but they are selling fast! At an average of 8 days on the market, condos and townhomes are selling 33.3% faster compared to March and 60% faster than a year ago.
Price increases (and higher rates) in the market may be driving buyers to this more affordable segment, so we'll continue to monitor how the coming months play out in the attached market.
What's next for incoming inventory and mortgage rates remains to be seen. However, one hitch we're keeping an eye on is what's known as a "mortgage rate trap."
Over the last several years, especially from 2020 through 2021, historically low interest rates allowed millions of homeowners to refinance their mortgages and lock in rates of 2-4% which reduced their monthly payments by hundreds of dollars in some cases.
Thus, they are in no rush to move or trade up. It could certainly lead to a slowing of incoming inventory before we truly reach a balanced buyer/seller market.
As always, your best bet is to talk with a PorchLight agent who can advise you on when to make your move and how to submit a strong offer that takes into consideration rising rates and your budget. They can also connect you with reputable lenders who can get you the lowest possible rates.
To view our report on Denver real estate market stats for April, click here.
Tips and Steps for Getting a Home Mortgage
Applying for a mortgage is a major part of the homebuying process. And there's a lot riding on it beyond getting the funds necessary to buy. If you've taken the right steps, you'll secure the best possible mortgage rate—incredibly important considering percentages are on the rise.
And by having all your financial ducks in a row, you'll make a better impression on sellers when submitting an offer and get to the closing table without delay. Then you can simply sit back and enjoy relaxing on the back patio with mountain views that you've been dreaming about.
Here are the seven steps—you can also talk to your real estate agent for further guidance or help finding a mortgage lender that's easy to work with and there to assist you through the process.
- Check and Repair Your Own Credit: It's no secret that a higher credit score is vital to locking in the best rates. So, get your free annual report and address anything suspicious or inconsistent. See what debts you can knock out quickly and make a plan to continue reducing your debt.
- Lower Your Debt-to-Income Ratio (DTI): Typically, lenders want mortgage and home costs to be no more than 28% of your gross income. Once everything is calculated, your DTI should be no more than 36%. With fewer debt payments, you’ll have greater buying power.
- Get Pre-Approved by Your Lender: Submitting an offer with your loan amount pre-approved is a must in today's market. For this step, a lender will look closely at your finances and require documentation regarding your credit, income and debts.
- Look Beyond Home Price: Even if you're pre-approved for a certain amount, keep other costs in mind such as property taxes, homeowners insurance, HOA dues or condo fees. As a buyer, you'll also need to provide earnest money, as well as pay for an appraisal and home inspection.
- House Hunt with a Real Estate Agent: Pay nothing out of pocket while having an experienced guide to help you choose a home, submit a strong offer, negotiate terms, as well as tap into their resources and connections to get you to the finish line faster than doing it on your own.
- Gather Your Financial Documentation: Your lender’s underwriter can only move as fast as you can provide your information. So, have records ready for bank accounts, tax returns, car loans, credit cards, any other debts, plus assets such as investments, other properties and your 401k.
- Don’t Make Changes to Your Job or Finances: Even after you're “clear to close,” a lender will continue to track your finances and credit score until the day of closing. Don't make major purchases, take out credit cards or change jobs. Maintain the status quo until all paperwork is signed.