Annual home price appreciation in metro Denver topped 23% for the second month in a row in April and barely missed matching a record high set in March, according to a closely watched home price index.
The S&P CoreLogic Case-Shiller Home Price Index for metro Denver rose 23.6% year-over-year in April after a 23.7% gain in March. Those two readings represent the highest rates of annual home price appreciation seen in Denver in records going back to 1986. From February 1999 through August 2001, the index did have a long streak of double-digit gains as tech and telecom spending boosted incomes, peaking out with an annual gain of 15% in February 2001.
For 13 months now, annual home price gains in metro Denver have surpassed the prior record set in 2001.
“We continue to observe very broad strength in the housing market, as all 20 cities notched double-digit price increases for the 12 months ended in April,” said Craig Lazzara, managing direct at S&P DJI in the report “A more-challenging macroeconomic environment may not support extraordinary home price growth for much longer.”
The April gains came before mortgage rates on a 30-year mortgage started spiking toward 6%. The “peaking” pattern seen in Colorado was also seen in the national index, which reported a 20.6% gain in March and a 20.4% gain in April.
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“The slowing of monthly gains, which were up 2.1% (nationally), also suggest further deceleration ahead. Signs of a tipping point toward a greater balance between buyers and sellers are increasing, albeit only compared to some of the most competitive conditions since the early 2000s,” said Selma Hepp, deputy chief economist with CoreLogic, in an emailed statement.
Hepp said the active inventory of homes for sale is starting to build up and more sellers are having to drop below their original list price to complete a deal. She said a deacceleration in monthly gains was especially noticeable in the western part of the country, where a rush to get ahead of rising mortgage rates contribute to stronger price surges earlier this year.
Although strong price appreciation and higher borrowing costs are weighing on would-be homebuyers, mortgage rates at even 6% remain below the rate of overall inflation, which has gone above 8%. And potential buyers who continue to rent are seeing their costs rise as well by staying put.
Annual apartment rent inflation is running at a rate of 14% nationally and 12.7% in metro Denver in June, according to a monthly update from Apartment List. The report put the median rent in metro Denver for a one-bedroom at $1,485 and $1,798 for a two-bedroom.
