DENVER — The Federal Reserve announced Wednesday it will raise the benchmark interest rate another 0.75% as it continues to fight near-historic inflation.
Previous rate hikes this year have already impacted Colorado’s housing market, with the 30-year fixed rate mortgage surpassing 6% for the first time since 2008. Home sellers and real estate agents have told Denver7 the impact to buying power has caused the state’s white hot market of recent years to cool.
Denver7 spoke with Joann Paige, a seller in Aurora who has seen the market shift firsthand. She and her husband first listed their home in 2020, and were inundated with interest and offers.
“We had multiple offers,” Paige said. “We had multiple showings. Literally, my phone was beeping every like five minutes, because it was just showing after showing.”
Despite the intense interest in their home, the Paiges decided to pull it off the market in 2020 and remain for a couple more years. Now, they are looking at a move out of state and have re-entered the market. They re-listed their home in mid-August to find a much different market dynamic.
“You can definitely tell it has definitely subsided,” Paige said. “I think that everyone was just kind of spoiled [before]. You know, house going to market in a day and being sold the very next day.”
The Paiges came to a decision with their realtor that more sellers are now facing — dropping their listing price by about $30,000 to adjust to lower buying power from buyers facing higher mortgage rates. Real estate agent Joy Dysart told Denver7 she’s having conversations with both her buyer and seller clients to align their expectations with market shifts.
“We’re just not getting enough showings,” Dysart said of recent months. “There is some feeling of, “What is going to happen next?” But I think overall, we’re in a great location. We live in Denver. We still have low inventory. I mean, that is the key to this. There are still buyers out there. There are still people that haven’t made decisions on a new home. So, I think it will still go — maybe not as fast, and I think that might be good.”
The brokerage firm Redfin found that Denver tied with Sacramento for fifth in the nation for fastest cooling housing markets in August. Even still, it lists Denver as one of the most competitive and expensive markets in the nation, which is why Joann Paige still feels confident she will find the right buyer before she moves away.
“I don’t feel like we’re in a bad place,” Paige said. “I just feel like we’re kind of just leveling things out. And I still feel good about it.”