Median Home Values Aren’t Decreasing, But Home Listing Prices Might Be

As the average 30-year fixed mortgage rates keep hovering around 6%, there’s an expectation that prices of homes for sale will fall. It’s been less than two weeks since the rate went into effect, so it’s a bit too soon to see the impact.

On Monday, the average list price for a house for sale in Denver was $742,773. Three days later it dropped 2.9% to $721,517, according to multiple listing data provided by Open Door. Meanwhile, during the same three days, the median closing price fell $26,000, or 4%, to $619,000.

While it may seem interest rates are affecting list prices, the $619,000 price tag in June is still 13.6% higher than median closing prices a year ago in June. Additionally, a spokesperson for Opendoor, stressed that “It’s important to note that the median price hasn’t changed.”

According to Nicole Bachaud, a senior economist at housing site Zillow we had this huge acceleration, this huge boost in spring of 2020 that continued into 2021 that was the strongest year for housing that we’ve really ever seen. Now we’re coming to this period where things are going to cool down really fast as well. And that’s going to look like whiplash for a lot of buyers and sellers in the market.

Industry experts agree, it doesn’t appear the markets will crash, but it’s going to look very different than it did in December of 2021. And a big reason for that is there’s still demand from consumers to buy a house.

As for rising interest rates, this isn’t the first time in recent history that mortgage rates hit 6%. A notable period for mortgage rates were the 1980s, when rates were in the teens, according to the Federal Reserve economic data. The peak of 16.64% in 1981 makes today’s 6% a bargain.

Becoming a homeowner in 2022 may seem too ambitious with such a fluctuating market, but it definitely can be done. Contact Metrowest today and let’s discuss your options!