It is officially May, and this means graduation parties and Class of 2025 signs in yards will be a common sight in neighborhoods across the Denver metro area soon! These won’t be the only signs we see in front yards when driving through neighborhoods though.

Sellers have shown up and started the 2025 selling season strong, with some reports stating there are more homes for sale now than we’ve seen since 2009. This can be witnessed by the number of for sale signs in the front yards across Denver. In fact, while writing this Denver Market Update, we see that in the past seven days there were 2,137 new homes for sale, while only 1,270 homes went under contract. This means in a 1-week time period, there are now 867 more homes for sale than this same time a week prior. Sellers are feeling this trend with fewer showings and even fewer offers.

This Denver real estate update might be a bit of a surprise for our readers, especially if you read our Denver Market Update from April, which noted a pickup in activity and renewed energy in the market as we moved out of March. So, what changed, and why is the market slowing in a time we historically see it heat up for the summer rush?

It’s no surprise that the overall economy and global market conditions have been on shaky ground for most of 2025. This is evident in the stock market, which has seen several red days and is down year to date overall. Until April, these conditions didn’t appear to be directly affecting Denver’s real estate market — but that seems to be changing. There are two main reasons why we’re seeing the effect in the Denver real estate market.

1. The first reason is the uncertainty buyers are feeling towards the economy as a whole. This is causing many to wonder what the economy will look like in the coming months and even years—specifically, whether home values will rise or fall due to global economic conditions and uncertainty around the cost of everyday household goods. Uncertainty causes buyers to pull back and evaluate their purchasing decisions before making a purchase; this is especially true on a large purchase, such as buying a house.

2. The second, and likely biggest reason buyers have pulled back when historically they would be jumping in the market is due to interest rates. Interest rates dropped noticeably in early March, with many borrowers locking in rates in the low 6s. However, this was short lived, and interest rates shot back up throughout April with most borrowers seeing high 6s and even low 7s once again. These higher interest rates, along with the uncertainties within the economy, are turning buyers off and causing them to watch the real estate market from the sidelines versus jumping in and making a purchase.

So, how will this affect Denver’s real estate market as we head into summer 2025? Time will be the only true way to know. However, my prediction is that unless we see interest rates come back down, buyers will continue to be slow to get into the market. Sellers will have to decide whether to wait for a serious buyer—with the for sale sign taking up a more permanent residence in the front yard—or reduce the asking price to entice hesitant buyers on the sidelines to jump into the market with a lower purchase price.

Any way you look at it, there are strategies for both sellers and buyers looking to make a change in their residence in the summer of 2025. Having a clear idea of the current market conditions and how to maximize your sale or purchase will be key. Working with an experienced Denver area real estate agent that understands these market conditions will ensure that you have the strategy to make your real estate goals a reality. Contact a TK Homes agent today and let’s talk about your specific real estate goals for 2025!

~ Written by CEO/REALTOR® Trevor Kohlhepp