The Montrose market continues to behave like a summer market as we head into the traditional spring selling season. Home prices in Montrose have increased an astonishing 19% compared to the same period last year, with the median sales price now at $450,000. In addition, homes are selling 102% of list price on average.
The national market experienced solid price gains for the first quarter of 2022. Existing home prices gained a strong 15% year over year. Despite the increase in mortgage rates, buyers continue to compete over the few homes available for sale. But keep in mind that many buyers putting homes under contract for purchase were pre-approved and locked at a lower rate months ago.
Presently the average 30-year fixed mortgage rate is sitting at 4.9%, up from 3.3% in December. Historically this massive rate increase, in only a few short months, will eventually dampen buyer demand. Time will tell in the next 6-months how rates will shift the housing market.
Any indicator of a cooling market could be a good thing. Current market conditions have created a hyper seller’s market with buyers having to compete on levels never seen previously. Any tapering in the market would likely produce more homes for buyers to choose from with less competition. The flip side of this market shift is affordability. A 1% increase in mortgage rates, in this current environment, results in a 30% increase in a monthly mortgage payment. Monthly payments have risen by 28% from one year ago. This monthly payment increase could directly correlate with an eventual cap in housing price appreciation in the long term.
Here’s the rate correlation equation: Increase yield on a 10-year treasury bond = increased mortgage rate = increase in monthly mortgage payment = decrease in buying power = price trend shift = decelerated market = increase in housing inventory. And yes, there will be a quiz on this.
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Statistics gathered from CREN MLS, criteria are all residential not including mobile or manufactured housing in Montrose. If you have a brokerage relationship with another agency, this is not intended as a solicitation. Equal opportunity housing provider. Each office is independently owned and operated. For sale by owner data not included in research findings. Sales data reflects sales from homes not limited to the Atha Team LLC. This information was gathered from Keller Williams, The National Association of Realtors, CoreLogic data analysis firm, Montrose Association of Realtors, CMU Department of Business and Economics, InfoSparks, YCharts, National Association of Realtors, Cornerstone Home Lending, and the Mortgage Brokers Association. This data is considered accurate but is not guaranteed. Copyright Atha Team LLC 2022. All Rights Reserved.