The 2024 Colorado Real Estate Market

February 7, 2024 | denver-housing-market

As we navigate the landscape of Colorado real estate, a common thread of questions weaves through the minds of homeowners and prospective buyers. What will the future hold for my property’s value? How will fluctuations in interest rates impact the market? Is the present moment opportune for buying or selling?

Myriad Factors Influencing Conclusions

Colorado’s (and the Nation’s) real estate market is influenced by complex factors. The robustness of both local and national economies, the ebb and flow of inflation and its subsequent effects on interest rates, and demographic shifts like population growth and migration patterns play significant roles. Moreover, the availability of housing—spanning across resale homes, rental rates, and new construction—alongside geopolitical happenings and the buzz of a presidential election year, add layers of complexity to our analysis and predictions for 2024 real estate.

Three Primary Conclusions

In our quest to demystify these complexities, we’ve distilled our observations and analyses into three conclusions that answer the real estate questions for most consumers about the 2024 Colorado real estate landscape:

  1. Interest Rates Stable to Declining: Mortgage interest rates will see volatility throughout the year, but most likely trend down, ending the year in the 5-6% range. 
  2. Home Value Appreciation: While we will see more sellers in this year’s market than last, we will also see an uptick of buyer activity, driving a seller’s market.  We project a 3-5% appreciation in home values for 2024. 
  3. Market Volume Growth: Transaction volume will increase by 15-20%.  With interest rates stable to declining, we will see more sellers wanting to sell in addition to more buyers feeling they can afford to buy again. 

Acknowledgment of Uncertainties

The path of prediction is not without its fog. International conflicts in regions like the Middle East, Ukraine, and Taiwan hover as uncertainties, potentially impacting consumer confidence, manufacturing and supply chains. Such disruptions along with surprising labor market activity could exert upward pressure on inflation, nudging interest rates higher and slow the real estate market. Additionally, domestic spending patterns in the United States, which could maintain elevated inflation levels, remain an enigmatic piece in the puzzle of interest rate trends.

Interest Rates Driving Market Activity

It is well known that interest rates began their unprecedented rise starting early 2022.  What may not be as well understood is the profound impact this rate shift had on both market volume and surprisingly, price stability. 

Between July of 2020 and January of 2022, 30-year mortgage rates ranged from 2.5% to just over 3%. 

During this time, we saw a tremendous volume of real estate transactions nationwide, and Colorado was no exception.  But more importantly, the vast majority of American homeowners capitalized on this unique financial period and refinanced their primary mortgage, leaving more than 75% of households with a in interest rate below 4%. 

Price Stability Guaranteed?

This has led to another unique period, but this time in the broader residential real estate landscape where price stability is almost guaranteed.  More than 75% of American homeowners have little motivation to move when interest rates are high due to their current low rate and payment.  Even if their household has financial problems, the equity in their home and the relative low payments of their mortgage will have Americans fight to stay in their home like never before. 

As a result, unless mortgage rates drop markedly, real estate inventory will remain suppressed as we will not see a rush of sellers to the market. And if rates do drop and a rush of sellers hit the market, this rush will be outweighed by the opportunity for buyers to get very inexpensive loans and once again, demand will outweigh supply.  

This market condition leads to a historic price stability for residential real estate.  It will take years of higher interest rates before this unique market stabilizing ingredient subsides. 

The Impact of Rates on 2022 and 2023

The below chart shows a 5-year history of mortgage interest rates from January 31, 2019 through January 25, 2024. 

By mid-2022, mortgage rates had surged by nearly 3% in just five months, topping 7% by October. This sharp increase in interest rates led to a significant slowdown in the real estate market, as potential sellers were deterred from listing their homes unless absolutely necessary, and many prospective buyers found themselves unable to afford the higher payments. As a result, the volume of transactions in the national real estate market plummeted. Specifically, in the Denver area, sales of resale homes dropped from 59,831 in 2021 to 40,084 in 2023, marking a dramatic 33.1% decrease.

Despite this downturn in activity, home prices did not see a substantial decline outside of the typical seasonal dip experienced from June 2022 to January 2023. This period witnessed a sharper than usual decrease, yet prices rebounded in 2023. This resilience can be attributed to the basic economic principle of supply and demand. 

During the peak of the 2022 selling season, the average sale price for a home in Denver exceeded $720,000, with single-family homes reaching an average of $824,000. By the end of the year, these figures had declined by nearly $100,000. However, due to persistent demand and limited supply, prices nearly returned to their previous levels within six months. By January 2024, the Denver market had experienced a year-over-year appreciation of 4.8%.

2024 Real Estate Prices Rising

In October of this last year, we predicted a turning point in the trajectory of interest rates. This prediction was not a product of speculative foresight but rather the analysis of inflation trends over the preceding twelve months. It is this same analysis of inflation data that underpins our current forecast, suggesting a continued, albeit modest, downward adjustment in interest rates throughout 2024.

Impact of Interest Rate Decline

The reduction in interest rates towards the end of the year acted as a catalyst, invigorating buyer activity and increased fourth quarter market volume. We anticipate this pattern to persist into 2024, characterized by a gentle decline in interest rates accompanied by a resurgence in buyer and seller market engagement.

Market Dynamics

A consequential aspect of declining interest rates is their effect on market participation. For current homeowners, as the gap between the cost of existing mortgages and the prospective payments on new properties narrows, the prospect of selling and purchasing becomes more attractive. This dynamic is poised to attract a greater number of sellers to the market. However, with rates declining, the surge in buyer interest is expected to outpace the increase in sellers, a disparity that will inherently drive real estate prices upward as demand outstrips supply.


The interplay between declining interest rates and inflation data not only informs our understanding of recent market movements but also provides a solid foundation for predicting future trends. The anticipated modest reduction in interest rates in 2024 is expected to stimulate buyer activity, increase seller participation, and, due to the imbalance between demand and supply, contribute to an upward pressure on real estate prices.

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