According to Redfin data, most homeowners with a mortgage in Colorado have a rate below 4 percent. With today’s higher interest rates, homeowners are staying put, leaving buyers with few homes to choose from.

Redfin chief economist Daryl Fairweather said that mortgage holders are experiencing the "golden handcuffs" phenomenon. They might have a great rate now, but likely can't move without spending a lot more cash.

Only about 4 percent of homeowners with mortgages in Colorado had a rate above 6% as of late 2022. And 29 percent had a rate below 3 percent.

Overall area experts agree that inventory is low, but not critically low. The vibe in terms of housing availability is that the inventory swings will not be as intense this year, in either direction.

The golden handcuffs phenomenon isn't new, but because mortgage rates have more than doubled, it's starker than ever, Fairweather said.

Buying a median-priced home in the Denver metro requires a lot more cash than it did when rates were lower; however, buyers are also exploring adjustable-rate mortgages or buydowns in hopes of a lower monthly payment.

To reach a balanced market, Denver needs to build more rental and for-sale housing to move the needle toward a more balanced market.

Also worth noting is that this phenomenon is not just impacting the Denver metro. Nine in 10 U.S. homeowners secured mortgage rates below 6 percent, per a national Redfin report. In the U.S., mortgage rates have swung between 6 percent and 7 percent in the last 10 months.

While it is true that fewer homeowners are moving, there are still motivated sellers out there. If you are interested in checking out what is available in Denver now give Metrowest a shout – we would be happy to explore your options!