We’re over a month into the war with Iran, and Colorado is feeling the effects of the war with increased fuel prices at the gas pump as tensions show little to no signing of ending. But, are increased gas prices the only thing being affected by the war? Let’s see how Denver’s real estate market is holding up during these uncertain times.

The biggest thing we’re seeing affected by the war is interest rates. Earlier in the year buyers were enjoying lower interest rates than we’ve seen since they went up in 2022/2023. Many borrowers were locking in rates below 6% for the first time in years. The hope was these rates would continue to trend down and make new loans more affordable. With the war, interest rates have shot back up, and many borrowers are now seeing rates locked in at or even above 6.5%; the same rate we saw for most of 2025. A recent report I read stated that refinance applications dropped 40% in the last 30 days, which makes perfect sense, considering rates are not any more attractive than they were this time last year. Higher interest rates don’t just affect refinance applications, but also buyers looking for a new loan as well. The higher interest rate we’re seeing today means a house priced the same as this time last month will now come with a noticeably higher monthly mortgage payment.

With just the fact that interest rates are higher, it’s no surprise that we’re seeing the effects on the Denver real estate market. Just when we were starting to see more buyers come into the market, now we’re seeing them retreat. At this time, I would not say we’ve lost all of the spring market momentum, but the upward trend we were experiencing at the end of March is definitely gone, and the market is once again showing signs of cooling off. This cool off is coming when historically we’d see the market ramping up for the popular summer market. It’s not just interest rates causing buyers to pull back.

Buyers are making one of the largest, if not their largest, financial purchases when buying a home. In many cases, it’s a 30-year commitment with their mortgage. If they are feeling uncertain about the economy or what is to come in the upcoming months, they are often going to pull back and wait until there is more clarity. I think that is what we’re seeing right now. With interest rates higher, gas prices climbing almost daily and much uncertainty locally and globally, buyers are pulling back and putting buying a house on pause.

However, even with these uncertain times and interest rates on the rise, we’re still seeing homes go under contract. It is often homes that are well updated or priced aggressively that are getting the attention of buyers. This tells us that the demand is still here in Colorado, and if you’re a seller wanting to sell, you can do it, even while many buyers are pulling back. As a seller, you’re going to have to be more flexible and realistic with your valuation; you can’t push the value and expect to be competitive with the house down the street that is more updated and asking less.

For buyers, now might be a great time to jump in the market and take advantage of the pullback due to the current global economic conditions. With increased and increasing inventory, buyers may potentially be able to negotiate a lower purchase price or higher concession amount for a rate buydown, helping them navigate the higher interest rate while they wait to refinance when rates come down. Waiting until the market conditions change could mean having to compete with more buyers and not having as much negotiating power to get a lower price or higher concession amounts.

Regardless if you are buying, selling or just watching the market, we expect to see the most recent stats for Denver show positive appreciation for March and then likely depreciation and lost values for April. The big question will be—how long will this trend continue? Will it end up being a short-term pullback with a quick rebound in the next couple months, or are we settling into a longer-term downward trend for most of 2026? Since we don’t have a crystal ball, the best thing to do is visit our blog the first Thursday of each month and get the most current update on Denver’s real estate market with our monthly Denver Market Update article!

~ Written by CEO/REALTOR® Trevor Kohlhepp