The U.S. central bank has said that it will be raising interest rates next year which could slow down the rapid rise in Colorado’s housing market.
With low inventory and low-interest rates, home prices shot to records throughout Colorado. The Federal Reserve recently suggested that it intends to raise borrowing rates around three times in 2022. The goal in raising the interest rates to stem inflation. Meaning that mortgage rates will likely grow higher.
Higher interest rates are a double-edged sword when it comes to buying a home. The reason is that people ultimately have less purchasing power when rates rise. However, at the same time, rising rates can create a slow down on the price gains, ultimately making homes more affordable.
The median price of a single-family home in metro Denver is $543,000, up more than 16 percent from a year ago.