All Denver Real Estate Blog

All Denver Real Estate Blog *** 1-877-378-8213 ***

Larry Hotz, Kentwood Real Estate, Greenwood Village, Colorado
  • Denver MLS Search
  • Home
  • Relocation
    • Denver Neighborhood Finder
    • Relocation Package
    • Relocation Articles
    • Relocation Map
    • Denver Suburbs
    • Corporate Relocation
    • Denver Weather
    • Denver Realtor Testimonials You Can Trust
  • Luxury Real Estate
    • New Luxury Listings
    • Luxury Homes Blog Articles
    • Cherry Hills Village
    • Greenwood Village
    • Castle Pines Village
    • BackCountry
    • Heritage Hills
    • Luxury Gated Communities
  • Blog
    • Latest Blog Articles
    • Real Estate News
    • New Denver Homes
    • Realtor Stories
    • Denver Relocation
    • Home Loans
    • Kentwood Company
    • Downtown Denver
    • Stapleton
    • Evergreen, Colorado
    • South Suburbs
    • Boulder, Colorado
    • Highlands Ranch
    • West Suburbs
    • Louisville
    • North Suburbs
    • Aurora
  • Buying
    • Home Mortgage Rates
    • Buyer Broker Advantages
    • First Time Homebuyers
    • Denver Metro Schools
    • Denver Crime
    • Interactive Denver Crime Map
    • Denver Churches
    • Denver Synagogues
  • Selling
    • Free Home Valuation
    • Kentwood Company
    • Kentwood Advertising
    • Agent Criteria
    • Listing Services
    • Seller Tips
    • Out-State Referral
  • About Us
    • The Hotz Group REALTORS®
    • Meet Larry Hotz
    • Luxury Homes Realtor Elizabeth Hotz
    • Trust Meredith Hotz
    • Dotson Skaggs, Castle Rock
    • Martin Team, Littleton
    • Robert McGuire, Downtown
    • Boulder, Louisville Realtor
    • Tom Cryer, Denver Relo
    • Meet Steven Kruse
You are here: Home / Home Loans / Can Higher Mortgage Interest Rates Help This Market?

Can Higher Mortgage Interest Rates Help This Market?

June 16, 2022 By Sean And Janet Willcox Leave a Comment

Mortgage interest rates expert

Veteran Realtor Sean Willlcox explains how rising Denver mortgage rates might help the real estate market.

A healthy real estate market exists when Buyers have a reasonable number of listings to choose from and Sellers are getting their homes sold in a reasonable amount of time for a stable dollar amount.  Currently, we have a market skewed heavily to the advantage of the Seller.  

This sounds great for sellers, until you consider the fact that historically, about 90% of our purchases are locals looking to buy after they sell their homes.  This portion of the market has whittled down to primarily local sellers who can afford to buy first and then sell their current home later. So, that eliminates a lot of us!

Can Rising Mortgage Interest Rates Help?

Now, along comes what just may be the Hero in the White Hat. Believe it or not, rising interest rates just might help us out!  Take a look at the three charts below. They appear to indicate early signs of a slowdown. That’s largely due to rising mortgage interest rates, coupled with a few other factors. 

Denver Metro Market  Real Estate Report

To view the latest Denver Metro Area Market Report, please click here.  This report includes all properties sold in the Denver Metro area through the end of April.  As I view the data, here is the item that pops out at me.  In past years, when the inventory starts lower than the previous year, the same trend continues throughout the year.  This is the first year in many years that inventory started lower than the previous year but then rose above the previous year’s inventory by March and rose even higher in April. 

Why is this?  I think it is primarily the rise in interest that is slowing the buyers a bit. Plus, that allows housing inventory to finally make a much-needed recovery.   I will talk more about the possible implications below in my wrap-up.

Denver Metro Luxury Market Report

View the latest Denver  Luxury Real Estate Market Report here  This report includes all properties above $1.5M, sold in the Denver Metro area through the end of April.  As you review the Luxury graph, you’ll notice considerably more volatility in these numbers than the above, broader report. That report uses all sales in all price ranges into account.  This is normal within the luxury real estate market.  The values in this sector are usually slower to rise early in a real estate cycle, then rise at a greater pace as the cycle progresses.  The sales in this sector have increased 50% year over year for the months of March and April.  This rise in sales stunted a rise in inventory for the same time period.    

Mortgage interest rate history

The chart above shows the last 50+ years of Denver mortgage rates. Currently we are back where interest was in 2019 and still well below the 50-year average of 7.8%.

The Bigger Picture Effects Denver Real Estate Too

 Currently, as a nation, we are focused on several unknowns within our economy and our world.  These include inflation, fear of recession, war in Ukraine, rising interest rates, a falling stock market, and a historically low inventory of homes across the entire country.   Each one of these is an inflection point with questions and consequences associated with each outcome.   When we go through this roller coaster of emotions, people tend to hold their breath in anticipation of what is to come.   

This trepidation, coupled with rising interest rates, appears to be slowing the broader market, as can be seen in the first chart.  This might seem like a negative; however, balance in this market is the healthiest thing that can possibly happen for both Buyers and Sellers alike.  Consider the fact that the majority of our Sellers want to become Buyers right after they sell.  Like a self-fulfilling prophecy, this fear of selling when the inventory is low is a key factor in keeping the inventory low.

What’s Next for Denver Mortgage Interest Rates

I suspect that several, but not all, of these unknowns will resolve over the next few months, allowing people to take that first big breath after we clear a few hills on the roller coaster.  I think we will be left with rising Denver mortgage rates: possibly even into the high 6%, low 7% range.  This is the type of change that people will soon put into perspective, relative to the long-term cost of borrowing money. (See mortgage rate chart above.)  As the market slows and inventory rises, the local Sellers with strong equity in their homes will begin to sell their current homes and buy the home they have been holding off on for years.    The likelihood that the market will slow enough to create an over-supply of Sellers is exceedingly slim, especially when you consider that currently we have 6 to 12 Buyers, depending on price point, for every available home.

Here Is What I’m Hoping For!  I think we might be headed to a healthier market, where homeowners who live in Denver, and have wanted to make a local move for a long time, are going to begin to be comfortable with the available inventory and their ability to not only sell, but also buy in the Denver market.  When this begins to happen, we know we have arrived at a healthier market for both Buyers and Sellers!
Do you have questions about the market – use this form below.

Get more information quickly...


No votes yet.
Please wait...

Filed Under: Denver real estate market, Home Loans Tagged With: Denver mortgage rates, Interest Rates

About Sean And Janet Willcox

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Easy MLS Search for Listings

All fields are optional

Advanced Denver MLS Search 

Find Your Perfect Neighborhood  

Denver Relocation Resources

Best Denver Suburbs

Denver City Neighborhoods

Denver Neighborhood Finder

Denver New Homes

Home Buyers Relocation Package

Denver Crime

Denver Metro Schools

Interactive Relocation Map

Denver City Neighborhoods Map

Denver Crime Map

Search Over 1100 Pages

Featured Properties

S. Holly Street, Cherry Hills Village, CO

4480 S. Holly Street in Cherry Hills Village

Price: $6,950,000 Bedrooms: 7 Baths: 10 Sq. Ft: 12,392 square feet total Year Built: … [Read More...]

463 Detroit Street – Cherry Creek North Townhome

Discover this Sprocket Designed Organic, Modern Home! Price: $2,395,000 Bedrooms: 5 Baths: … [Read More...]

14226 E 1st Drive A03 in Cherry Grove East

Price: $220,000 Bedrooms: 1 Baths: 1 Sq. Ft: 756 total Year Built: 1982   14226 E 1st … [Read More...]

Happy Clients

https://youtu.be/YQXmzMQnGuc
"Best Realtor we've ever had"

More Video Testimonials

Copyright 2000-2023 by Loren Hotz Owner of All Denver Real Estate. All Rights Reserved. Loren (Larry) is a Broker Associate of The Hotz Group at Kentwood Real Estate. Some articles on this real estate blog were written by Brokers employed by various brokerages including Kentwood Real Estate as identified. Market statistics for the City and Denver Suburbs were provided by the Denver MLS search company, ReColorado. This site uses Google Analytics to track web visitors and enhance their experience. See GA Privacy Policy here