Colorado’s Market Enters a New Phase

Colorado has been through a dramatic real estate cycle over the past five years, shaped by rapid appreciation, limited inventory, and the effects of higher mortgage rates. As we look toward 2026, the landscape is changing again. Inventory is projected to climb, buyers are returning, and sellers finally have room to make decisions that felt impossible during the height of rate lock tension.

This next phase will be different from the pandemic boom and the cooldown that followed. It represents a gradual normalization that still favors well-positioned homeowners and offers new opportunities for patient buyers. At Corken + Company, we see 2026 as a year shaped by more balanced movement rather than dramatic swings.

Existing home sales are expected to rise by 14 percent in 2026. Prices are also expected to increase, but at a slower and more sustainable pace of roughly 4 percent. These numbers provide useful context for Colorado since our state typically follows the same directional trends, but with local nuances that depend on lifestyle demand, migration patterns, and regional economic growth.

Buyers who stepped back over the last two years will likely take another look at the market as mortgage rates continue to ease. Rates are projected to settle closer to an average of 6 percent in 2026, which is significantly more manageable than the highs of the past several years.

More inventory, modest rate relief, and steady demand will shape how Coloradans navigate this new era.

Why More Homes Are Finally Coming to Market

For years, one of the biggest challenges in Colorado real estate has been an extreme imbalance between supply and demand. Many homeowners who wanted to move stayed put because they held mortgage rates far below the prevailing market. This rate lock effect was a powerful force that constrained inventory and kept prices elevated.

In 2026, that dynamic starts to lighten.

As mortgage rates drift closer to 6 percent, more homeowners will consider listing because the financial penalty of trading a low rate for a higher one becomes slightly less daunting. Some will move for lifestyle reasons, others for family needs, and many because they delayed plans longer than expected.

Demographic data adds an extra layer to the story. Baby boomers continue to hold a substantial portion of U.S. homeownership, with adults 55 and older now owning more than half of all homes nationwide. While many boomers plan to stay in place, life events, relocations, and long-term planning will push some toward selling in the years ahead.

Even a gradual increase in listings has an outsized impact in Colorado, where available homes have been chronically insufficient. More homes hitting the market in 2026 does not signal a downturn. Instead, it marks a healthier and more functional market after years of imbalance.

Prices Keep Climbing, Just More Slowly

The expectation for 2026 is a price increase of about 4 percent, a rate that hits a sweet spot between stability and sustainability. For Colorado homeowners, this is good news. It signals continued equity growth without the runaway acceleration that made buying nearly impossible for many families earlier in the decade.

To understand the trajectory, it is helpful to look at recent appreciation. Five years ago, in the second quarter of 2020, the national median sale price was just over $317,000. By mid-2022, that figure soared to nearly $438,000, a 38 percent increase in just two years. Prices cooled slightly afterward, dipping to around $410,000 in early 2025, but this still represents almost 30 percent growth since the beginning of 2020.

Colorado tracked similarly during that period, with some markets such as Douglas County, Boulder, and Highlands Ranch experiencing even faster appreciation.

Given that recent history, a 4 percent gain feels measured. It provides predictability for sellers and a more manageable hurdle for buyers, especially those entering the market for the first time.

Affordability Remains the Defining Challenge

Even with easing rates and slower price growth, affordability will continue to shape Colorado’s market in 2026. The share of first-time buyers recently reached a record low of 21 percent, and their median age climbed to 40. This shift reflects the financial realities facing younger buyers, who often battle rising rent, student loan debt, and high down-payment requirements.

At the same time, the typical cost of a starter home has risen dramatically. What was once a median price of $95,000 in 2012 rose to $165,500 in 2019 and then surged to $250,000 by 2024. In Colorado, that number can be significantly higher depending on the neighborhood.

Although greater inventory will relieve some competition, it will not immediately solve affordability. Many households will continue to feel stretched, especially those trying to stay below the guideline of spending no more than 30 percent of income on housing.

Projections suggest that affordability may gradually improve by the end of the decade if mortgage rates settle closer to the mid-five-percent range and home price growth slows to a modest, consistent pace.

For now, buyers will continue to rely on strategic guidance, creative financing approaches, and thoughtful neighborhood selection, all areas where Corken + Company’s local expertise supports long-term decision making.

Colorado’s Demographics and Lifestyle Trends Shape Demand

Colorado’s appeal extends beyond price and availability. Lifestyle factors continue to influence buyer behavior, even in a market defined by higher costs.

Outdoor access, year-round recreation, proximity to employment centers, and strong community identities in areas like Parker, Castle Rock, Highlands Ranch, and the Foothills continue to attract interest. With many workers still in remote or hybrid roles, buyers remain willing to explore a broader range of locations.

Demographics will also remain a driving force. Baby boomers account for 20 percent of the population but represent more than 37 percent of homeowners. Many intend to stay in place because their homes are paid off or because they are deeply connected to their communities. Their decisions will continue to influence inventory levels for years to come.

Meanwhile, adults aged 35 to 54 have seen their share of homeownership fall from 42 percent in 2008 to 34 percent in 2023. This group includes many mid-career professionals who may be looking to upgrade or relocate in 2026, making them particularly sensitive to improving inventory and favorable mortgage rates.

Understanding who is most active in the market is just as important as understanding what is available.

Navigating 2026 as a Colorado Seller

For homeowners considering selling, 2026 offers a promising environment. With buyers returning and inventory rising gradually, sellers can expect a more traditional experience that feels less frenzied than the bidding-war years.

Pricing strategy will matter more than it did during the surge of 2020 through 2022. Homes that are thoughtfully prepared and correctly positioned will continue to attract strong offers, especially in desirable Colorado communities where demand remains consistent.

Many sellers also appreciate that moving in 2026 feels more feasible. After years of uncertainty, homeowners now have clearer expectations regarding rates, timelines, and market conditions.

Navigating 2026 as a Colorado Buyer

For buyers, the outlook is cautiously optimistic. Inventory will be higher, competition more manageable, and mortgage rates a bit easier to work with. While affordability remains challenging, especially for first-time buyers, the 2026 landscape offers more pathways to ownership than we have seen since the start of the decade.

Buyers who stay flexible on location, property type, and timing will find meaningful opportunities. Working with an experienced advisor makes a significant difference in identifying homes that offer strong long-term value.

Colorado remains a region where lifestyle and financial investment intersect. For buyers who navigate the process strategically, 2026 may be the right moment to enter a market that is gradually normalizing.

Looking Toward a More Balanced Market

Colorado real estate will continue to evolve, but 2026 represents a welcome shift toward stability. More homes will come to market, sales activity will rise, and price growth will steady itself after several intense years. While affordability challenges remain, especially for younger buyers, the overall outlook is healthy and optimistic.

Whether you are planning to buy or sell, the deepest advantage comes from partnering with a team that knows Colorado’s market rhythms. Corken + Company has been guiding clients for more than two decades, and 2026 will be another year where informed strategy makes all the difference.

To explore your possibilities, visit www.corken.co or call 303-858-8003.