What in the World is Happening With Interest Rates and the Market in Colorado?

written by Kristen Naylor 8/13/2025

2025 has been a year full of empty promises from the Fed. Over and over we have heard that rates should come down, but as instability continues in the economy, rates have remained stubborn. As we draw near to the next Fed meeting in September, I have concerns about the Fed fulfilling its promises that rates should start falling this year.

Since 2023, we have seen inventory steadily increasing and have just recently reached a 10 year high in inventory of active listings. Consistent with this, the months of supply for all property types across the entire MLS has increased to 3.6 months. However, surprisingly the data across the entire MLS show that prices have not fallen substantially to help with affordability. We still have buyers sitting on the sidelines waiting for rates to drop, and there are still have buyers absorbing some of the inventory.

We have just seen in the last 2 weeks mortgage rates begin to decline in expectation of a September Fed rate drop. My expectation is that once the 30-year-fixed rate drops to around 6%, that buyers will start to peak their heads out and start considering purchasing homes again- this has been the case in the fall of 2024 and again early in 2025.

My advice for buyers and sellers? If you are a buyer and want to get the best terms of your offer accepted, NOW is the time to do that before rates potentially drop more and brings more competition to the market. For Sellers, it is more important than ever to price your home competitively and to make sure your home is in the best possible condition to stand out above the other inventory. And of course, make sure you are working with Real Estate Agents that can show you data about the market and help you get the best results- either great terms on the buy side or ensuring your home is at its best when listing.