How are rising mortgage interest rates likely to affect home sales in Denver for properties over $1 million, and how is the Denver housing market economy likely to trend over the next several months? According to US Bank [1], rising interest rates are likely to slow down the housing market in Denver at certain price points. Inflation has led to the Federal Reserve increasing interest rates, which reduces the purchasing power of borrowers and makes borrowing more expensive. This decrease in affordability can lead to fewer buyers in the market, which slows down home sales. Specifically, for properties over $1 million, it is possible that rising interest rates may lead to a decrease in demand, as potential buyers will have less purchasing power.

Looking forward, US News and USA Today [2], [3], provide different forecasts for the Denver housing market. While Denver is currently experiencing a seller’s market, meaning there are more active buyers than there are homes for sale, Zillow forecasts that Denver home values are expected to decline by 2.2% between Nov 2022 to Nov 2023, but the aggregate algorithm used by Zillow often does not control for nuances that exist in the more micro markets within the city. Additionally, the median sale price was down by 1.8% in February 2023 Y-O-Y, but the number of homes sold dropped 42.1%. Overall, the market is expected to slow down and become more favorable for buyers as prices drop and properties stay on the market longer. However, it’s important to note that home values vary depending on the neighborhood and other factors. 

Therefore, it is likely that rising mortgage interest rates will have a negative impact on home sales in Denver for properties over $1 million. The overall housing market economy in Denver is expected to become more favorable for buyers over the next several months, with prices dropping and inventory increasing.

Sources:

1. https://www.usbank.com/investing/financial-perspectives/investing-insights/interest-rates-impact-on-housing-market.html
2. https://www.usatoday.com/story/money/personalfinance/real-estate/2022/03/16/housing-market-2022-raising-mortgage-interest-rates/7083218001/
3. https://realestate.usnews.com/real-estate/articles/denver-real-estate-housing-market-forecasts-trends