rueth team 2024

Certainty is a Basic Human Need and Homeowners Today Have it | Guest Post

As an industry, the real estate market has been feeling the stress. Rate volatility, buyer shutout, seller lockdown and inventory crisis have become common topics of conversation. Those of us in it every day are hyper-focused on this distress. When I step back and look, I can’t help but be reminded of the advantages.
Nicole Rueth

As an industry, the real estate market has been feeling the stress.  Rate volatility, buyer shutout, seller lockdown and inventory crisis have become common topics of conversation.  Those of us in it every day are hyper-focused on this distress. When I step back and look, I can’t help but be reminded of the advantages.


Certainty is one of the six basic human needs and homeowners today have it. They had an unprecedented opportunity to lock in a 30-year fixed mortgage at an interest rate in the 2’s or 3’s. Today 71 percent of Colorado homes have a mortgage. Meaning 29 percent are owned free and clear, that’s certainty. 92 percent of those mortgaged homes are locked in with a rate under 5 percent, more certainty. 

Additionally, if those homeowners bought at the height of the market in 2005, their home has increased in value by 142 percent. If they bought right before the pandemic, they’re up 44 percent. They’re good. 

Conversely, if a local homeowner bought at the height of the pandemic, they’re value is down 8.7 percent. While I don’t love that; I have to ask, who is day trading homes? Who’s coming home from work and telling their kids “our home is down 8 percent, we need to move”? No one, because homeownership is certainty, it’s stability. 

The stability of homeownership in contrast to the current volatile market gives all the justification needed to understand why DMAR’s February data shows new listings for both detached and attached homes are at the lowest levels since 2014.  

Year-to-date new listings are down 27 percent from 2022. Yet, we did see a little uptick as February had 589 more homes come on the market from January. Can we double-click on how low this number is, just for a second? 589 homes in the 11-county area…an area where 3.3 million people live. 

Fewer new listings have given way to fewer year-to-date closings; but again, February did it’s best to drown out the winter doldrums with a 22 percent uptick in closings over January.

Buyer activity responded to a half a percent drop in rates in January quickening days on the MLS to 25 from 34, lifting the close-to-list price from 98.15 percent to 98.88 percent, and increasing median closed prices by just over 4 percent to $562,500. Now that’s pent-up buyer demand and the direct result of a 50 percent increase in January’s pending sales due to rates.

Despite mortgage rates bouncing up from 5.99 percent to 6.94 percent; pending sales were still up 19 percent over January, buyers scooping up new listings and dropping our active listing count at month end to 3,778. 

This is the second-largest drop in Denver’s inventory going from January to February.

Our current market will endure long-term pressures on inventory, including sellers converting existing homes into rentals, reduced residential construction spending, single-family construction starts for rent higher than for purchase, and the recent growth of Jeff Bezos’s heavily funded Arrived Homes which is taking crowdfunding the purchase of single-family rentals to a new level. So what are we going to do about it?

Buyers want Homeowner Certainty

While opportunistic sellers might be waiting, sellers who are living their lives are continuing to do so. Inventory will continue to come onto the market, albeit limited. Knowing it’s limited, requires a buyer to be ready.

Mortgage purchase applications dropped to their lowest level since 1995 partly due to the recent rate spike. This gives the buyers who are active an advantage. But know they are not alone. The previous 12 weeks of positive purchase application data are now in the system, and those folks who applied for a loan are looking and buying.  

Pending home sales tells is proof. Some buyers are willing to jump in knowing they can refinance when rates subside. Some are clear on the long-term growth opportunities of real estate and less deterred by rates. And some buyers are simply doing life. 

And then there are those who are waiting for rates to drop. In just one month a mortgage payment on Denver’s median priced home went up by $444 a month, as home prices increased 4.39 percent and rates rose 1 percent. This increase to affordability and a household’s budget is real.  So let’s consider where rates are going. 


Going into the new year, the markets were convinced and even celebrated only 2 more fed rate hikes as inflation started showing signs of easing. January’s data, reported in February, regretfully told a different story. One of strong employment gains and a resilient consumer.  

February’s Core PCE inflation also ticked up spooking the markets into believing inflation will persist, thereby requiring the Federal Reserve to remain restrictive for longer. Fed futures now have a possible 4 rate hikes in 2023 with rate cuts pushed out to 2024.

The incessant volatility of the mortgage rates is a reflection of the underlying tension between financial market expectations and economic data which continues to highlight resilience.

While there will be opportunities to lock in lower rates; expect this sideways movement through May. There is much debate about year-over-year inflation comparisons giving us lower rates in March, slightly higher rates in April and lower rates in May again; however, the true drop in rates will come with the decline in month-over-month inflation and a release of the current job market constraint. 


While certainty is a basic human need I can say with absolute certainty the Denver real estate market will certainly continue to remain not so certain in the coming month.  But, I’ll be certain to keep my eyes on the trends that are moving the markets and keep you updated.


Until next time, this is Nicole Rueth with the Rueth Team. It’s my pleasure to keep you updated.


The views, opinions and positions expressed within this guest post are those of the author alone and do not necessarily represent those of the Denver Metro Association of Realtors®. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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