Industry leaders and analysts throughout the country predicted that the national mortgage volumes would top the $3 trillion markthis year. Most of them mainly attributed this forecast to the increasing downward pressure on borrowing rates.
Falling rates, inventory shortages, increasing home prices, and the general rise in loan sizes are some of the main factors expected to push the U.S. housing market past the $3 trillion marks.
Projections from the Mortgage Bankers Association predicts an approximate volume of $2.75 trillion this year, meaning that we should prepare for another record-setting year.
Reports from Inside Mortgage Finance highlights that capacity constraints have caused fierce competition among mortgage lenders and prevented rates from declining further. Home prices are reportedly driving the huge loan volumes this year.
Most of the local housing markets in the U.S. recorded close to 50% cuts in their housing stock, while the Zillow website reported a 33% year-over-year drop in its overall property listings by the start of the year.
The Zillow report continues to highlight that the robust home demand is forcing most sellers to accept offers three weeks faster compared to a similar time in 2020. This online property platform further correlates this buying behavior with the current increase in home prices.
The median list price in Zillow started increasing by a double-digit year-over-year rate from October 2020. The U.S. National home price index by Case-Shiller reported an 8.4% yearly price gain rate for this period.
Denver’s position in the U.S. home market
According to recent survey results published by Zillow, Denver is ranked fifth-hottest housing market in the nation this year.
Its main objective was to assess property price expectations, analyzing predictions made by over 100 real estate specialists. About 56% of those surveyed expect Denver’s home value growth to outperform the national average this year.
The median home value in Denver is $481,402, an 8.2% rise over the past year. Real estate cost here nearly doubles the national average and is projected to escalate by 7.6% in the next 12 months.
The Zillow report continues to explain how the pandemic increased housing market activities in Denver and led to a boom throughout 2020. Industry experts predict that the Denver housing market will not upend due to the COVID-19 outbreak this year.
Historically low mortgage rates coupled with the high number of millennials buying their first homes will continue to pressure home prices in Denver moving forward.
In the “Great South Migration” experienced last year, a Bloomberg survey ranked Denver as the eighth most-moved-to city in America since April 2020. Another migrations report by Hire A Helper revealed that the pandemic was the main reason why more than 15% of the migrants relocated to Denver.
Colorado’s third-lowest property tax rate of 0.49% coupled with a marginal personal income tax rate of 4.63% played a big role in luring most of the newcomers to Denver
The Denver housing market recap
Denver recorded a spike of 11% in its apartments for rent applications last year, keeping rents higher for most parts of the year.
With more than five clinically tested COVID vaccines, Colorado is currently under Phase 1A and 1B of the national coronavirus vaccination plan. Clinical approvals and the ongoing administration of these vaccines have restored normalcy, and apartment rental prices are now decreasing.
According to the Rent Cafe website, the average rent price for an apartment in Denver this January is $1,631, a 2% decline from last year.Denver’s 151,260 (51%) households are rent-occupied, and close to 14,319 apartments are currently available for rent in Denver.
Active inventory in the Denver housing market has been decreasing drastically due to record-setting home buying activities. This trend will most likely continue until June, and we should expect buyers to become more aggressive with their offers for the better part of 2021.
The December Denver Metro Association of Realtors’ report highlights that there were only 2,541 properties left during New Year’s Eve after home buyers closed 2020 with 4,807 home sales.
With a shrinking house stock and heightened home prices of nearly $600,000 in the Denver metro area, home hunters urgently need to pair up with competent real estate and property management companies such as Woodruff Property Management.
Our property managers are highly reliable and capable of helping you navigate through the tough housing market.