May Metro Denver Market Review

In May, the Denver Metro real estate market continued to exhibit subtle yet significant shifts. While mortgage rates continued to hover around 7%, buyers gained leverage thanks to growing inventory, wage growth, and expanded income limits for lending programs.  Median prices remained steady year-over-year, and homes stayed on the market longer than they did last spring, allowing buyers time to shop and negotiate. Sellers are still achieving strong results, particularly with strategic pricing and effective presentation.

Inventory on the Rise, Giving Buyers More Options
Inventory levels grew again in May, marking the fifth consecutive month of gains. Active listings climbed 13.67% from April to 13,599, a substantial 48.48% increase from last May. Detached homes, in particular, experienced a significant month-over-month increase in inventory, rising 16.15%, while attached homes increased by 8.93%. New listings were up only slightly (3.14% month-over-month), which suggests more homes are experiencing more days on market. Median days in the MLS remained at 13 overall, unchanged from April, but up from 9 days last May. For detached homes, the median days on market dipped slightly to 10, while attached homes rose to 25, representing a 13.64% increase from the previous month. This creates space for buyers to take their time and negotiate on price or concessions.

Prices Hold Steady Amid Changing Market Conditions
Home prices in the Denver Metro area remained stable. The median closed price across all home types was $600,000, down 0.66% from April and unchanged from May 2024. Detached homes posted a 0.76% increase month-over-month to $665,000, while attached homes saw a more notable bump, with a 4.52% increase to $405,000.

The increase in the condo and townhome segment may reflect rising activity among first-time or budget-conscious buyers, especially as affordability improves quietly. Wages rose 4.3% year-over-year in April, and personal income posted the most significant monthly jump since 2021. When paired with a flat pricing environment and expanded loan limits, more buyers are gaining access, even if interest rates haven’t dropped significantly.

Buyer Activity is Gradual, but Growing
Pending sales rose 6.88% month-over-month, a signal that buyers are stepping back in, but carefully. A new survey by Realtor.com found 23 % of  Millennials intend to buy a home this spring, up from 15% last fall. Many are watching the market closely for the right opportunity. While closed sales dipped slightly from April (-2.63%), this reflects slower movement earlier in the spring rather than a lack of demand.

Expanded eligibility for programs like Home Possible, HomeReady, CHFA, and Metro DPA is also opening the door for more buyers. Denver Metro’s Area Median Income (AMI) increased, which triggered an increase in the income caps for these programs. These higher thresholds will allow more moderate-income households to qualify for down payment assistance and favorable loan terms.

Sellers Can Still Succeed with the Right Strategy
Although market conditions are shifting, sellers continue to see success, especially those who price their homes appropriately and prepare them for the market. The close-price-to-list-price ratio remained unchanged at 99.32%, and despite an increase in days on market, many listings are still drawing solid offers. However, the gap between pricing and presentation is widening. Homes that come to market overpriced or underprepared tend to stay active longer, prompting price reductions or concessions.

Sellers who respond to feedback quickly and are open to negotiation, especially around inspection items or rate buydowns, are meeting the market where it is and moving forward successfully.

Mortgage Rates: Stability Over Sensation
Mortgage rates remained within a narrow 0.2% range in May, offering buyers much-needed predictability. While rates remain around 7%, the lack of volatility has helped increase buyer confidence. Wage growth, stable prices, and broader income eligibility are now doing more of the heavy lifting when it comes to affordability than rates themselves. 

Looking ahead, the Fed is not predicted to cut interest rates in their next meeting, but Fannie Mae and the Mortgage Bankers Association continue to predict mortgage rates in the 6.1% to 6.4% range later this year. If those drops arrive, buyers could face increased competition. Today’s market still presents opportunities for those who are ready to act.

Key Takeaways for Buyers and Sellers
This market isn’t rushing in any one direction, but it is moving. For buyers, increased inventory, stable pricing, and expanded loan access make this a more negotiable and navigable landscape than last spring. For sellers, success is still within reach, but a strategic approach is essential, especially when it comes to pricing and responding to feedback. As we head into the summer months, preparation and flexibility will remain the keys to navigating a shifting market.