Friday Fun Facts – Does the Federal Reserve affect Mortgage Rates?

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The federal funds rate and mortgage rates are both types of interest rates, but they operate differently. The Fed directly controls the federal funds rate, which primarily influences short-term interest rates, while mortgage rates are determined by lenders based on long-term bond yields and various economic factors like inflation and market demand. This means that while both rates can move in the same direction, they don’t always do so. For instance, when inflation rises, mortgage lenders may increase rates to protect their returns, even if the Fed lowers its rate. This nuanced relationship reflects differing priorities: the Fed balances inflation with job market stability, while lenders focus on the erosion of their future payments. Historical data supports this divergence, illustrating that Fed rate changes don’t consistently correlate with mortgage rate adjustments.

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Friday Fun Facts – The 1651 Day Wait is Over

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It’s been 1651 days since the Federal Reserve last cut rates.

During this era of rising rates, we’ve seen:

  • Mortgage rates peak at nearly 8% in October 2023
  • Existing home sales plummet to 1995 levels
  • Home affordability hit a 40-year low

So when we got the news this week that the Fed was cutting interest rates by 0.55%, we were elated.

Not because this single interest rate will dramatically decrease overnight – but because this signals that this is only the beginning and not the end of interest rate cuts.

What to expect – more buyers, increased competition.

To help you navigate the process of buying or selling your home, please reach out to your Windermere agent.

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Friday Fun Facts – It’s All About the FED

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You may have heard that the Federal Reserve Board (FED) is meeting next week – so what does that mean? Think of the Fed lowering interest rates like a store putting items on sale. When prices drop, people are more likely to buy things. Similarly, when the Fed reduces interest rates, borrowing money becomes less expensive. This encourages people to take out loans for homes, cars, or businesses, and helps boost the economy by making it easier and more appealing to spend and invest. It’s like making the cost of borrowing money more affordable, which gets things moving!

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Best Time to be a Buyer in 10 Years

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As we move into the fall, the real estate market is providing a rare opportunity for buyers who have been waiting on the sidelines for years. Inventory levels are higher than they’ve been in a decade, and sellers are increasingly open to negotiations, making repairs, offering concessions, and even accepting contingent offers to close deals. This presents an exceptional chance for buyers to leverage their negotiating power before potential rate drops lead to increased competition in the marketplace.

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Reasons for Celebrating Labor Day

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We celebrate Labor Day, the federal holiday that occurs on the first Monday in September, to honor the contributions of American workers and the labor movement, which played a crucial role in securing fair working conditions, better wages, and reasonable hours for employees across various industries. The holiday recognizes the importance of the labor force in building the nation’s economy and improving the quality of life for workers.

Reasons for Celebrating Labor Day:

  1. Recognition of Workers’ Contribution: Labor Day is a tribute to the social and economic achievements of American workers. It acknowledges the role of labor in building the nation’s strength, prosperity, and well-being.
  2. Commemoration of the Labor Movement: The holiday celebrates the labor movement’s historical efforts to improve working conditions, such as the fight for the 8-hour workday, the establishment of weekends, and the implementation of safety regulations. These achievements were hard-won through protests, strikes, and negotiations.
  3. Public Awareness: By dedicating a day to labor, the holiday raises public awareness of the social and economic issues faced by workers. It encourages continued efforts to improve labor laws and protect the rights of employees.
  4. End of Summer: Labor Day also marks the unofficial end of summer in the United States. It is often associated with the last long weekend of the summer season, prompting various outdoor activities, barbecues, and parades.
  5. Cultural Significance: In addition to its historical and social importance, Labor Day has become a time for family gatherings, community events, and the start of the school year in many regions.
  6. Symbolism: The holiday symbolizes the labor movement’s success in securing workers’ rights, including the 8-hour workday, weekends, and protections against unfair labor practices.

Overall, Labor Day is both a celebration of workers and a reminder of the ongoing efforts to improve labor conditions in the U.S. and recognition of the contributions of all workers to the nation’s well-being.

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The Last Decade

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Did you know home values in Larimer County have more than doubled in the last ten years?

Larimer County average prices are up 125% compared to 2014.  Weld County’s are up 134%

Here’s where it gets interesting…

Many people would guess that a significant portion of those gains occurred in the last five years.

However, in Larimer County the last five years of price growth was only slightly higher than the previous five years.

Weld County actually saw more price growth, on a percentage basis, from 2014 to 2019 as compared to 2019 to today.

The post The Last Decade appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

The Last Decade

/in , , , , , , , , , /by

Did you know home values in Larimer County have more than doubled in the last ten years?

Larimer County average prices are up 125% compared to 2014.  Weld County’s are up 134%

Here’s where it gets interesting…

Many people would guess that a significant portion of those gains occurred in the last five years.

However, in Larimer County the last five years of price growth was only slightly higher than the previous five years.

Weld County actually saw more price growth, on a percentage basis, from 2014 to 2019 as compared to 2019 to today.

The post The Last Decade appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Halfway Check

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This is a market which is changing quickly.  We are studying the numbers every day so we can be clear about where the market is heading.

Here is a check on the market halfway through October.

Compared to last October…

  • Available inventory is up 73% in Northern Colorado and up 112% in Metro Denver.  This is significant for buyers who, for years, were challenged with limited selection.
  • Number of closed transactions is down 50% in Northern Colorado and 41% in Metro Denver.  This reflects the fact that fewer buyers are active right now given higher interest rates.

Prices continue to be higher than last year.  They are up 12% in Northern Colorado and 13% in Metro Denver.  We don’t expect double-digit increases to continue, but don’t expect anything like a price crash.

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Most Multi

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There are more multi-family residential properties under construction than at any time since 1974.

 

890,000 properties with 2+ units are currently being built across the United States.  This includes both for-sale product, and for-rent product.

 

Additional supply is clearly beneficial for both buyers and renters and will hopefully relieve some of the housing affordability issues.

 

So, why are there so many multi-family units under construction?  There seem to be three key reasons.

 

1.  The rental market is especially undersupplied with product and developers see this opportunity.

 

2.  With the increase in residential prices, multi-family becomes the only option for many first-time buyers. 

 

3.  Supply chain constraints are causing extended construction timelines.

The post Most Multi appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.

Most Multi

/in , , , , , , , , , , , , , , /by

There are more multi-family residential properties under construction than at any time since 1974.

 

890,000 properties with 2+ units are currently being built across the United States.  This includes both for-sale product, and for-rent product.

 

Additional supply is clearly beneficial for both buyers and renters and will hopefully relieve some of the housing affordability issues.

 

So, why are there so many multi-family units under construction?  There seem to be three key reasons.

 

1.  The rental market is especially undersupplied with product and developers see this opportunity.

 

2.  With the increase in residential prices, multi-family becomes the only option for many first-time buyers. 

 

3.  Supply chain constraints are causing extended construction timelines.

The post Most Multi appeared first on Fort Collins Real Estate | Fort Collins Homes for Sale & Property Search.