According to a monthly update from the Denver Metro Association of Realtors (DMAR), price gains flattened and the inventory of homes available for sale continued to rise in May, an early signal that higher mortgage rates might be finally starting to pull metro Denver’s housing market back to earth.

There were 3,652 homes and condos available for sale at the end of May in metro Denver, which is 14% more than the number available at the end of April. Even more noticeable, inventory 76% higher than at the end of May in 2021, when the market was starved for supply.

The inventory of single-family homes available was 111.6% higher than a year ago, while the inventory of condos and townhomes was up 11.5%, an indication that higher prices are pushing buyers more toward more affordable attached housing options.

In comments going with the report, Andrew Abrams, chairman of the DMAR Market Trends Committee in comments accompanying the report noted that buyers have become more patient in their approach as the cost of money has become more expensive. Likewise, he said, sellers are having to realign their expectations to sell their properties.

Rates on a 30-year conventional mortgage have moved from around 3% at the start of the year to above 5%, according to FreddieMac. Abrams predicts the full impact of higher interest rates, however, likely won’t emerge until after the summer, and that the housing market will be a story of “two halves.”

Predictions for the second half of the year include lower inventory, lower or flat prices and longer stays on the MLS (multiple listing service.) Currently, the lack of inventory and strong demand from buyers continues to support the market for now. The question is for how long.

The median price for single-family homes sold in May was $670,106, which was down 1.5% from April, while the median price for condos and townhomes was $430,000, a decrease of 2.27%. Median prices are about $10,000 below where they were in April.

While money is more expensive thanks to higher interest rates, more stable prices and more housing options are promising signs for buyers who’ve gotten burned out on the endless bidding wars and lack of choices.

Ready to see if 2022 is the year you become a homeowner? Contact Metrowest today – we’d love to discuss your options!