DENVER (KDVR) — Colorado’s housing market is cooling down faster than the nation’s.
The U.S. Federal Reserve has raised interest rates steadily this year and signals it may want to continue to do so in the coming months, according to officials. Inflation has still not cooled off its record streak.
Homes in the Centennial State are still as unaffordable as they’ve ever been, but Colorado’s housing market has been responding to the increased interest rates. The number of homes for sale has risen from record lows, although they are still beneath healthy levels.
The drop in the number of home sales has happened faster in the last month in Colorado than in the U.S. at large.
In June in the U.S., the number of single-family home sales dropped 4.8% from May, according to the latest market update from the National Association of Realtors. For all homes, it dropped 5.4%. There are fewer homes being sold now than even in pre-pandemic years.
The Denver metro’s home sales have fallen off more quickly, according to local data from the Colorado Association of Realtors. The number of single-family home sales in the seven-county Denver metro fell by 6.3%.
The dip in home sales is happening twice as fast in the Denver area than in the state of Colorado. In Colorado, the number of homes sales fell by 3.3% since May.
Economists and industry leaders have noted that climbing interest rates put homes out of reach for potential buyers who would have been able to afford them when interest rates were at record lows. Since Colorado has some of the nation’s most expensive real estate prices, interest rates could add massive sums to a mortgage payment.
The average national home sales price was $416,000 in June, the highest on record. In the Denver metro, the median sales price was $647,500 — 64% higher than the national average.