On February 23, 2023 the Federal Reserve raised it’s short term interest rate by a quarter percentage point bringing the federal funds rate to a range of 4.75 % to 5%. In anticipation of the rate hike the yield on the 10 year treasury notes dipped to 3.4% on Monday, February 20, 2023.
At the beginning of the month, the average annual percentage rate (APR) for a 30 year fixed-rate mortgage was 6.77%. This is more than double the 3.22% rate at the beginning of 2022.The 30 year fixed-rate mortgage came in this week at 6.42%. That’s down from last week’s 6.6% and two weeks ago the average rate was 6.73%.
Experts weigh in
“After a couple of weeks of volatility, mortgage rates are likely to stabilize as a result of this Federal Reserve hike,” said Holden Lewis, home and mortgage expert at NerdWallet. “Home sellers will have to make peace with the fact that they’re going to trade the low-interest rate on their current house with a higher rate on their next house, and they might not sell for the price they’re hoping for,” he said, adding, “Home buyers should accept that if they wait for interest rates to fall substantially, they might wait longer than they expect.”
According to the National Association of REALTORS® (NAR), first time home buyers represented 27% of buyers, down from 31% in January 2023 and 29% in February 2022. 28% of buyers were all cash sales, nearly unchanged from 29% last month an up from 25% in February 2022.
Pueblo County Area
Closer to home, the number of homes for sale is still up 69.3% from a year ago and months of inventory is double. We are still seeing homes sell for roughly the price that they were listed at. However, the number of homes sold is down nearly a third from last year.