Denver is experiencing the greatest sales growth in the fact of rising mortgage rates, according to new analysis from Ali Wolf, director of economic research at Meyers Research.
Based on year-to-date contract sales data, Denver's share of new home contracts went up 24 percent, five percent higher than second-place San Diego. Yet, once considered a moderately affordable metro, Denver is now one of the least affordable in the nation. Denver's new home closing prices grew 42 percent from 2012 to 2017, at nearly $500,000, while the median household income topped $75,000. Other cities with the most growth in Meyers Research's study include Las Vegas, Dallas, Portland, Ore., Indianapolis, Charlotte, San Francisco, and Atlanta.
The buyer urgency created by constant housing news coverage and ever-changing housing payments from rising rates is unmistakable. Last week, the Federal Reserve raised short-term rates for the second time in 2018. And, while we’ve mentioned time and time again that it is important to pay attention to Fed policy, it is also critical to remember the relationship between mortgage rates and 10-year Treasury yields. Luckily, after crossing the feared 3 percent threshold at the end of April, yields continue to be range-bound between 2.8 percent and 3.0 percent. This has helped stabilize mortgage rates, which currently sit around 4.6 percent.
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