Learn more about the housing market in Colorado

Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life.  

Key Takeaways

1. Colorado’s housing market remains competitive, with 2025 data showing modest inventory gains but continued affordability challenges due to long-term price growth.
2. Mortgage rates have stabilized in the mid-5% range, offering some relief to buyers but still limiting inventory as existing homeowners stay “locked in.”
3. Environmental risks—especially wildfire and hail exposure—are driving sharp rises in insurance premiums, increasing overall housing costs statewide.
4. 2026 is expected to bring gradual market balance, with more listings, slower price growth, and opportunities improving for buyers—though a full buyer’s market remains unlikely.

Colorado Housing Market Overview 

Colorado remains one of the most desirable housing markets in the western United States, known for its strong economy, outdoor recreation, and fast-growing metro areas. The state boasts a robust economy and a variety of natural attractions, including deserts, vibrant canyons, and ski resorts along the snow-capped Rocky Mountains. Mountain resort towns in Steamboat Springs, Craig, Edwards, and other towns attract thousands of outdoor enthusiasts each year, while Front Range cities like Denver, Fort Collins, Sterling, and Boulder present dynamic communities and stable opportunities for investors. 

Throughout 2024 and 2025, Colorado’s housing market has mirrored national patterns: elevated home prices, tight inventory, and mortgage rates that only began stabilizing after the 2023 spike. According to the Colorado Association of Realtors 2025 monthly reports, the state continues to face a significant supply shortage, which kept competition high and pushed a large share of listings to sell at or above asking price, particularly in the Denver metro and mountain resort counties.

Home prices have climbed steadily as well. Zillow and Redfin data for late 2025 show Colorado home values up roughly 4–5% year over year, and more than 40% higher than they were just five years ago. This long-term surge, paired with persistent low inventory, has made affordability a central challenge for Colorado households. The Colorado Housing Affordability Index fell throughout 2024–2025, reaching its lowest point in more than a decade.

It's not all bad news for Colorado buyers, however. Recent reports have indicated that some inventory may be freed up soon by those in the Baby Boomer generation looking to downsize. Although home prices will likely continue to rise until the supply balances, if interest rates are eased, buyers will resume activity in the market as well. 

Colorado’s local governments are taking measures to ease unaffordability, too. In the past, Colorado has struggled with restrictive zoning laws preventing affordable home construction. On May 13, 2024, Governer Jared Polis signed a bill requiring local governments to prioritize new housing near transit hubs. The bill encourages apartment and condo zoning near public transit in addition to more accessory dwelling units. Early 2025 data from the Colorado Department of Local Affairs and the Colorado Housing and Finance Authority shows a noticeable uptick in multifamily permitting tied to these reforms. While the state still faces an estimated shortage of more than 100,000 homes, analysts note that 2025 produced the strongest permitting growth in several years, which is a sign that supply may gradually improve heading into 2026 if building momentum continues.

Overall, as of late 2025, Colorado is moving toward a more balanced market, though it is still a competitive one. Inventory levels have improved modestly, and new listings in spring and summer 2025 gave buyers more options than in previous years. Most analysts expect 2026 to bring gradual improvements in affordability and availability, but not a full shift to a buyer’s market. Demand remains strong, and desirable Colorado locations are likely to stay competitive well into 2026.

Colorado Housing Market Trends 

To understand the Colorado real estate market, it’s important to keep up with trends. Let’s look at some key ones in the housing market Colorado currently has. 

Note: These statistics are based on Redfin’s monthly housing data from October 2025. 

Median Sales Price of Homes 

The median sale price in Colorado as of April 2024 was $625,200, a 2.2% decrease year-over-year. This places Colorado’s prices on the higher side, as one of the more expensive states to live in the US. Rising prices, interest rates, and buyer demand in the state have led to a continued affordability crisis in Colorado. 

Number of Homes Sold in October 2025

In October of this year, 6,547 homes were sold in Colorado, down slightly from from 6,629 sold last year. This metric gives us a good picture of the current sales volume in Colorado. However, keep in mind that nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%. 

Median Days on Market (DOM) 

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. A higher DOM signals a buyer's market as sales are slower and sellers have less leverage. 

The median days on market (DOM) in October for Colorado was 56 days, meaning that homes sell in 56 days after being listed, on average. Colorado’s current DOM is sits around the national average.

New Supply Statistics 

Housing supply in Colorado continues to shift, though not always upward. In 2024, Colorado issued 32,185 new residential construction permits, an 18.3% decrease from 2023, according to the U.S. Census Bureau’s Annual Building Permits Survey. This drop signals that new supply is not keeping pace with population growth or buyer demand, maintaining pressure on prices heading into 2026. Still, demographic trends, strong job markets along the Front Range, and migration patterns may influence construction activity in the coming year as builders respond to persistent demand.

Property Tax Rate 

The average property tax rate in Colorado is 0.55%, according to Rocket Mortgage. This places Colorado's average property tax rate as the 3rd lowest in the U.S. However, keep in mind that property taxes vary widely depending on the specific county of Colorado and the value of the home. 

Foreclosure Rate in Q1 of 2025 

According to ATTOM’s statewide summary for March 2025, Colorado had 1 foreclosure filing per 5,070 housing units. That rate puts the state roughly in the middle among U.S. states. It is neither among the highest nor lowest foreclosure rates.

Hottest Local Markets in Colorado 

Below are a few of the hottest local markets to keep an eye on in Colorado in 2026. 

1. Denver Metro Area

Denver, Colorado’s capital and largest city, has undergone a sharp shift in 2025. According to recent data, roughly 91% of homes in the Denver metro lost value over the past year, which is the largest share of any major U.S. metro. What once seemed like a booming seller’s market has cooled significantly. While the median sale price for certain homes remains near $599,000, rising inventory and increased delistings suggest that buyers now have more negotiating power and more options than earlier this decade.

2. Grand Junction

Grand Junction is another promising market in Colorado. This city saw substantial migration from states like California, Texas, and Washington during the COVID-19 pandemic, as more homeowners sought rural havens to work remotely. According to Rocket Homes, the median listing price for homes in Grand Junction is currently $530,000. Inventory has increased compared to last year, and days on market have fallen, showing that well-priced homes are selling faster as more buyers return and sellers add new listings.

3. Greeley

Greeley is another hot seller’s market, with homes selling for a median price of $425,000 in October 2025. Like Grand Junction, listings are up and more homes are for sale in Greeley come the spring and summer months, leading to a dynamic market to watch for the summer. 

4. Colorado Springs

South of Denver, the Colorado Springs housing market is another competitive market, with a median listing price of $470,000. Homes here currently sell in just over a month on average, and almost a third of them do so for above listing price. 

Economic Factors Impacting the Colorado Housing Market 

A holistic view of Colorado’s housing market requires a basic understanding of the main economic drivers affecting the market. Let’s look at a few critical ones below: 

Mortgage Rates 

High mortgage rates are a continuing challenge for would-be homeowners in the U.S. but Colorado's average rate for 30-year fixed-year mortgages as of December 2025 is roughly at 5.625%, slightly lower than the national average. While this lower rate offers some relief, many homeowners still feel “locked in” to their current properties because their existing mortgage rates are even lower. This lock-in effect continues to limit inventory, and prospective buyers should keep an eye on rate movements in the coming months to better understand how borrowing costs will shape Colorado’s housing market.

Inflation and Cost of Living 

Mortgage rates are tied to inflation, another massive contributing factor to the affordability of housing and the state of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in Colorado. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income. 

Population Changes and Demographics 

Population shifts, job growth, and migration trends remain important factors shaping Colorado’s housing market. According to a 2025 report from the Common Sense Institute, statewide net migration has dropped by more than 50% compared to a decade ago. While Colorado still draws many newcomers, especially from states like California and Texas, recent data show the overall outflow has outweighed in-migration, causing a small net population loss in 2025.

Insurance Costs 

Colorado faces another challenge: Natural hazards, specifically wildfires and hailstorms, are increasingly driving up homeowners’ insurance costs.  

According to the Colorado State Forest Service, one million Coloradans (just under half the state’s population) live in an area with a heightened risk of wildfire. Equally as devastating are the state’s hailstorms, such as this fatal storm that recently struck Greeley. 

These increased environmental risks come with increased concern for both homeowners and insurers. As of 2025, average homeowners’ insurance premiums in Colorado have risen nearly 60% over the past five years. Some companies in Colorado are refusing to write new policies for areas with high wildfire risk, leaving homeowners with mortgages no choice but to pursue more expensive nonstandard options.  

Insurance costs will continue to be a challenge continuing into 2026 as more natural disasters and other climate events impact Colorado’s markets. 

Colorado Housing Market Predictions 2026 

Colorado’s housing market continued moving toward balance through 2025, and early indicators suggest this trend will carry into 2026. While a full return to a buyer’s market remains unlikely, conditions are gradually becoming less competitive than the peak years of 2021–2022.

New listings that began rising in mid-2025 have modestly improved inventory across many Colorado metros, easing some of the pressure on buyers. This shift has reduced bidding wars in several markets and created more options for those re-entering the housing search after years of volatility.

And although home prices have continued to increase in recent months, their rate of increase in Colorado has slowed. Some experts predict this is a sign that the market may be stabilizing. 

In 2026, prospective buyers and investors in Colorado should watch for inventory, prices, and mortgage rates to reach an ideal balance that may mean buying in Colorado is a good option in the coming months and beyond. 

Likelihood of Colorado Housing Market Crash  

A housing market crash in Colorado is unlikely soon. The state’s strong job market, low unemployment rate, and increasing private-sector employment leads to a strong, sustainable housing market. Colorado’s market continues to grow and attract homeowners looking forward to the state’s unique natural and employment offerings. 

These factors and others will continue to affect the Colorado market, which investors and analysts will keep monitoring to track both national and regional trends impacting the region. 

Forecast for The U.S. Housing Market 

Now that we’ve looked at Colorado’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years? 

The United States' current median existing-home sale price is around $415,200 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 3 months, keeping conditions constrained.

We’re currently in a seller’s market with buyers looking at continued rising house prices—although they are rising at a slower pace compared to previous years.. The same trend can be seen with renters. Housing continues to appreciate, in general.

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In 2026, he predicts that existing home sales will rise an additional 13%. Yun expects mortgage rates to stabilize at the lower end of the current 6-7% range through 2025 and 2026 as the Federal Reserve continues gradual rate cuts. There's an anticipation of a more balanced market in the coming years, with moderate price growth and a greater amount of Americans re-entering the market.

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth.

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Year-to-date single-family housing starts were down about 7.1% in 2025, whereas starts for buildings with five or more units were up roughly 14.5% Higher mortgage rates and inflation (affecting price of materials) were the main causes.

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. According to the National Association of Home Builders, approximately 74.9% of U.S. households were unable to afford a newly built median-priced home in 2025. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.

Colorado Rental Market 

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.  

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.  

Colorado’s rental market cooled in 2024 as new units came online and demand leveled off, but by 2025 a major issue remains. Rent growth continues to outpace income gains, keeping affordability strained across much of the state.

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year. 

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.  

This short summary leads directly into Colorado’s current rental market, with key trends from Zillow:

Colorado Rental Market Key Trends 

• Median rent: $2,100

• Month-over-month rent change: -$50

• Year-over-year rent change: -$69

• Available rentals: 17,983

Conclusion 

The Colorado housing market heading into 2026 reflects a mix of improving opportunities for buyers and rising environmental and affordability pressures. Whether you're planning to buy or sell, staying aware of shifts in home prices, inventory, interest rates, and climate-related risks remains essential, as these factors will continue to shape real estate decisions throughout the state.

FAQs

Is Colorado expected to become a buyer’s market in 2026?

Not fully. Conditions are improving for buyers—more listings, fewer bidding wars, and slower price growth—but Colorado will likely remain a moderately competitive, seller-leaning market due to ongoing supply shortages.

Why is housing so expensive in Colorado?

Long-term demand, limited new construction, population growth over the past decade, and high insurance costs have all pushed prices upward. As of 2025, home values are more than 40% higher than five years ago.

Are mortgage rates going down in Colorado?

Rates have stabilized around 5.6%–5.8% for a 30-year fixed mortgage (late 2025). Economists expect only gradual declines in 2026 as inflation cools and lending conditions normalize.

What areas of Colorado have the strongest housing markets right now?

Denver, Colorado Springs, Grand Junction, and Greeley remain active markets. Denver saw cooling in 2025, but increased inventory has created more opportunities for buyers across the metro.

How is Colorado’s rental market performing?

Rents remain high but have softened slightly. As of late 2025, the median rent is $2,100, with inventory increasing and year-over-year rents down about $69—showing early signs of stabilization.