As the Federal Reserve continues to turn up the dial on interest rates, Denver-area realtors are seeing something that hasn’t happened in nearly 10 years: a potential cool down in the market.

In an effort to combat rising inflation, the Fed raised its target for the federal funds rate by 0.25%, or one-quarter of a percentage point. As the federal rate rises, so do mortgage rates offered by lenders across the state.

This pattern began back in January, with interest rates in the high three to low four percent range, and now we’ve hit the five percent range.

Rising interest rates are having a couple effects. First, people may be having second thoughts about buying at a higher cost, and secondly, they may have to lower their standards in the market.

Demand is still high; however, buying power is not. While it’s still considered a seller’s market in Denver, there are definitely signs the climate here is becoming healthier.

For example, the number of showings agents are seeing on their listings is down. Where they would see maybe 30 showings on a weekend, they now see about 15. Instead of 10 offers, they may see four or five. It’s still competitive, but some agents who’d previously expect 30 showings for a $600,000 home have actually lowered the listing price to drive up more interest.

Some agents say serious buyers may be able to get a home at the asking price or even write in a lower offer to get under contract, which is quite the change from the bidding-war battle buyers have faced in the Denver metro for years now. While others haven’t seen that trend, they have said the “reach” of how much higher potential buyers are going over the asking price is getting shorter. Some industry insiders believe sellers will realize that they shouldn’t expect 20% over, and they might list at a more responsible price.

Could now be the right time to become a homeowner in the Denver metro area? There’s only one way to find out. Contact Metrowest today and let’s discuss your options!