When you take out a mortgage to buy a house, you are essentially borrowing a large sum of money from a bank or other financial institution, which you agree to pay back over a long period of time with interest. The interest rate on your mortgage is the cost of borrowing that money, and it determines how much you will ultimately pay for your home.
The Federal Reserve is the central bank of the United States, and one of its main responsibilities is to set monetary policy in order to keep the economy stable and healthy. One way that the Fed does this is by setting the federal funds rate, which is the interest rate that banks charge each other for overnight loans.
When the Fed raises the federal funds rate, it makes it more expensive for banks to borrow money, which in turn makes it more expensive for you to borrow money to buy a house. This is because banks pass on the higher costs to their customers in the form of higher interest rates on loans, including mortgages. As a result, when the Fed raises interest rates, it can make it more difficult and expensive for people to buy homes, which can slow down the housing market and the overall economy.
On the other hand, when the Fed lowers the federal funds rate, it makes it cheaper for banks to borrow money, which can lead to lower interest rates on loans, including mortgages. This can make it easier and more affordable for people to buy homes, which can stimulate the housing market and the overall economy.
In summary, the Fed’s decisions about interest rates can have a big impact on the housing market and the overall economy, as they affect the cost of borrowing money to buy a home.
If you are looking to buy or sale a home in the Colorado Springs area, please give me a call at 7194406626.
We are closing out July 2021 w/an average closed price of $476K, an average of 7 days on the market and an average closed to list price of 104.03%. Conventional loans have dominated the market this month. Meridian Ranch continues to dominate as the top subarea for volume of sales.
80831 is leading the list of top 10 zip codes by volume of sales month to date in the area, selling for 3.75% more than list on average. 80918 is leading the pack in terms of closed to list price ratio, selling for 5.53% over list on average.
These stats are part of a custom built platform I have built to deliver relevant hyper local stats to my clients. Please let me know if I can help you!
Here are the top 10 subareas month to date. Meridian Ranch continues its reign at the top!
Here’s how to read this chart:
Meridian Ranch has 29 sales month to date at an average closed price of $515K, a median of $512K, an average closed to list price of 103.72% (selling for 3.72% above list price), an average of 6.17 days on the market, a median of 4 days on the market, an average seller’s concessions of $244 and a median seller’s concessions of $0.
Seller’s concessions are often referred to as closing costs. I dislike this reference because it lends itself to confusion; I like the more accurate description of “seller’s contribution (concession) to the buyer’s closing costs
Cash has the (significant) advantage of no appraisal but does it command the discount many feel it does? Let’s look at the data.
Below is a breakout of the purchase types of the sales YTD in the PPAR region. You can see there have been app 9,856 sales, 1646 of which have been cash. These on the average are paying 3.66% above list price. Contrast that with the 3.87% for conventional, 3.84% for FHA and 3.42% for VA and it’s immediately apparent that cash isn’t currently commanding the discount it has a reputation for.
There’s a common perception that, “Cash is King.” By this, it’s meant that cash tends to command a large discount.
Is that true in Colorado Springs?
Statistically not in December 2016.
There were 1,309 MLS listed sales for the month in the Pikes Peak Multiple Listing System (PPMLS) last month. Of those, 146 were cash. Of those 146, the average closing price to list price ratio was 98.3%.
Contrast that with VA loans for the same month, where the ratio was 100%.