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Drop in metro Denver homes sales will be steeper than expected

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The Metro Denver housing market is facing some major headwinds, with home sales falling more than expected and contributing to slower-than-expected price increases. Mid-year update from Denver Metro Real Estate Association..

Despite the worst pandemic of over 100 years, both 2020 and 2021 have been unexpectedly record years for residential real estate activity. Initial forecasts were that 2022 would be down about 4% to 5% from last year’s 63,684 closing. Currently, interest rate declines are approaching 7% to 9% and are expected to fall significantly further depending on the direction of interest rates.

“Given the current volatility, don’t be surprised by the numbers above 9%,” advised Steve Danyliwa, former chairman of the DMAR Market Trends Commission, in a mid-year update of the group.

Similarly, the Commission has lowered its forecast for rising home prices from 11% to 13% this year to 9% to 11%. This is still strong, outpacing the rise seen in most years before the pandemic. but, Annual consumer inflation rate continues to remain at 8.3%The real profit is close to 1% to 3%.

Initial predictions were based on the view that inflation was temporary and that mortgage rates in 30 years would skyrocket from just over 3% to nearly 6%, but not so sharply. The Commission predicts that mortgage rates will be between 6% and 7% by the end of the year.

Economists Nadia Evangelow and Lawrence Yun of the National Association of Real Estate Agents said that a typical Metro Denver buyer could pay $ 2,100 a month at the beginning of the year and buy a home for about $ 540,000. It says it was done. update.

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