2024 in Review
Looking Back at 2024, Looking Ahead to 2025
2024 brought significant shifts to the Denver real estate market. Elevated mortgage rates shaped buyer and seller behavior, modest price changes reflected a market recalibrating, and inventory levels saw substantial growth alongside longer days on market (DOM). Let’s take a closer look at the trends that defined the year.
Interest rates were a major story in 2024. The Federal Reserve eased the federal funds rate in the third and fourth quarters, causing temporary dips in mortgage rates. However, these benefits didn’t persist, leaving rates in the high six percent range by year-end. Buyers had to adjust to this new normal, moving away from the historically low three percent rates of recent years that are no longer realistic. Buyers have needed time to adjust to the affordability factors associated with the higher rates and increased home prices.
Detached single-family homes saw modest price growth despite elevated rates, while the attached home market faced unique challenges. Rising HOA fees, driven by higher insurance premiums and regulatory changes, contributed to slight price declines. These increasing costs made condos a tougher sell for both buyers and current owners.
The Denver market experienced significant inventory growth in 2024, with 55,839 new listings—a 12.6% increase from 2023. Properties spent an average of 38 days on the MLS, compared to just 14 days in 2021. By December, DOM had climbed to 56 days. Active listings also surged, ending the year with 6,888 properties available—a 38.56% increase from 2023. At one point, active listings surpassed 11,000, marking the highest levels since 2011. While this expansion provided buyers with more options, it also signaled a market shifting away from the frenzied pace of recent years.
While 2024 shared many similarities with 2023, it outperformed in several key areas, including inventory growth and transaction volume. However, elevated mortgage rates, longer selling times, and challenges in the attached single-family segment tempered overall performance. As the market continues to adapt, buyers and sellers alike will need to navigate a landscape defined by incremental changes and persistent headwinds.
2025 in Focus – Looking Ahead
Increased showing activity during the holiday season suggests that buyers are ready to re-engage with the market. Affordability will remain a key metric, driven by the interplay of mortgage rates, home prices, and wage growth. Encouragingly, Denver Metro’s Home Price Index reached a record high in Q3 2024, underscoring the market’s resilience.
Mortgage rates are expected to dominate the narrative in 2025, likely ranging from 6.25% to 7%, with potential easing in the latter half of the year. Builders will continue to offer mortgage buydowns to attract buyers, providing some relief from elevated borrowing costs. Federal Reserve Chair Jerome Powell has signaled caution regarding further rate reductions, citing persistent inflation concerns.
While elevated rates and affordability challenges will persist, the Denver market is expected to see steady activity. Buyers’ negotiating power has increased, thanks to higher inventory levels, but life events like marriages, births, and job changes will continue to drive demand. As rates stabilize, more buyers are likely to enter the market, further supporting home price growth.
Info For Sellers
Despite elevated mortgage rates, home values in Denver have continued to appreciate, which may encourage more buyers to act as they accept that lower rates aren’t guaranteed. Sellers will need to adopt strategic marketing approaches to stand out in a market characterized by heightened competition and growing inventory. With the traditionally busy spring market just around the corner, it’s an excellent opportunity to list properties, as buyer demand typically peaks during this season.
Info For Buyers
Early 2025 presents strong negotiation opportunities for buyers, especially before the spring market intensifies. While mortgage rates in the six to seven percent range may seem high compared to recent years, they are consistent with historical norms before 2008. For those seeking value, condos are becoming more attractive, with many offering incentives such as prepaid HOA dues. However, buyers should carefully consider monthly costs, including dues and insurance, to ensure the investment aligns with their financial goals.
As 2025 unfolds, adaptability and informed decision-making will be crucial. Whether buying or selling, having an experienced real estate agent by your side will be key to navigating this evolving landscape successfully. A trusted agent can provide valuable insights, strategic guidance, and market expertise, ensuring you make the most of the opportunities ahead.
*We use reasonable efforts to include accurate and up-to-date information. The real estate market changes often. We make no guarantees of future real estate performance and assume no liability for any errors of omission in the content.