Home prices are still on the rise, but so are interest rates. The buying power of your dollar descreases with the increase in interest rates. The 30-year mortgage rate shot up to 3.81% last week, the highest level in over a year. The Mortgage Bankers Association, Fannie Mae and the National Association of Realtors have all projected that the 30-year mortgage rate will be at least 4% by the end of 2013. For example, the monthly principal and interest payment will inrease at the following increments based on an interest rate rise from 3.5% to 4.0%. (Note: the table was provided courtesy of The KCM Blog.)
Core Logic reported this week that home prices in Colorado increased by 10.8 percent in April 2013 over April 2012. Nationally there was an impressive 12.1 gain year over year in April. Kentwood Real Estate reported that luxury home sales (priced at $1million and above) increased an incredible 140.7% year over year in April in the metropolitan Denver area.
As far as inventory numbers, in March, there were 6,945 homes for sale; in May there were 8,214, which is a typical increase seen for this time of year, yet the total available inventory is still hovering at a 20+ year low.