In this December 2025 market update, the speaker outlines a thawing U.S. housing market after a period of high rates, highlighting a 10‑15% rise in purchase mortgage applications and a 30‑40% jump in refinance applications, while closed sales have only modestly increased, indicating strong shadow demand. The labor market has cooled, with unemployment at 4.6% and job growth slowing, which has helped the Federal Reserve lower rates, though tech workers remain cautious. Inflation has eased to about 2.7%, stabilizing the 10‑year Treasury yield and allowing 30‑year fixed mortgage rates to settle at 6‑6.2%, providing buyers with predictable budgeting. National forecasts anticipate 2026 to be the strongest sales year since the pandemic, with mortgage rates expected in the high‑5% to low‑6% range, home price growth of 1‑4%, wage growth outpacing prices, a 16% rise in sales, and a 10% inventory increase driven by baby‑boomer listings. The speaker then provides a regional snapshot of the Colorado Front Range, noting modest price gains in Denver, mixed price movements and demand shifts in Colorado Springs, declines in Weld and Larimer counties, and a slight price drop in Boulder County, with inventory ranging from 2.9 to 3.2 months. The video closes with holiday wishes and optimism for a dynamic 2026, promising a January follow‑up.
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After years of frozen activity due to high rates, the market is finally showing signs of a thaw. Here is the current state of the market and the outlook for 2026. We are seeing a notable surge in buyer interest. As of mid-December 2025, purchase mortgage applications are up roughly 10 to 15% compared to this time last year. The gap, interestingly, while applications have jumped, closed sales have only risen slightly, about 2 to 4%. This suggests a high level of shadow demand— buyers who are getting pre-approved and shopping but are struggling to find the right home, or they're waiting for a final dip in rates. Refinance applications have also spiked, up nearly 30 to 40% year over year, as homeowners who bought at 7.5% in 2023 or 2024 rush to lock in the current rate which are in the low 6%. In the labor market, it's low hire, low fire. The labor market has cooled significantly, which is a double-edged sword when it comes to real estate. The unemployment rate has ticked up roughly 4.6%, and job growth slowed to just 64,000 new positions last month. The impact on housing? While a weaker labor market usually hurts demand, it has actually helped mortgage rates by convincing the Federal Reserve to continue cutting interest rates. However, many white-collar workers, especially in tech, remain cautious about making major home purchases due to job insecurity fears as companies stay in a low-hire mode. The main driver is that inflation has cooled from its 2023 to 2024 peaks, though it remains sticky around 2.7%. Because inflation is less of an immediate threat, the 10-year Treasury yield has stabilized. This has allowed 30-year fixed mortgage rates to settle into a new normal range of 6% to 6.2%. We are no longer seeing the weekly wild swings in rates that characterized the last 2 years, giving buyers much-needed predictability for budgeting. Most major housing authorities— National Association of Realtors, Zillow, Redfin— all expect 2026 to be the strongest year for home sales since the pandemic began. Mortgage rates are expected to average in the high 5% and low 6% ranges. What to watch for in 2026. Affordability gains. Home prices are expected to have modest growth of 1 to 4%, and for the first time in years, wage growth is expected to outpace home price growth, meaning homes will technically become more affordable even if prices don't drop. Home sales are forecasted to rise 16%, and there's going to be an inventory thaw. We're projected 10% inventory growth, As the lock-in effect finally breaks and more baby boomers are expected to list their homes in 2026, finally providing the mid-price inventory that first-time homebuyers have been desperate for. Here's what we are seeing along the Colorado Front Range. Single-family median and average prices were both up in the greater Denver area, and we saw a slight increase in demand of about 2%, and we're at 2.9 months of inventory. In Colorado Springs and El Paso County, we had slight average and median price increases for both single-family homes and condos and townhomes. Pending sales and demand slowed by about 10%. Weld County saw decreases in average and median prices on single-family homes and condos and townhomes, while pending sales increased by 8.6%. And we're at 3.2 months of inventory. Larimer County also saw price decreases for single-family homes and condos and townhomes in the 4 to 6% range. Demand also decreased by about 3.1%. And months of inventory is sitting at 3.2 months. Boulder County saw an average price drop of 2.5%, while the median price increased slightly, and both condo and townhome average and median prices increased by about 4%. Thank you guys so much for tuning into my market updates. I hope you have an awesome Christmas, wonderful holidays with your family and friends, and I'm excited for this next year. I think it's going to be incredible. There's a lot of buyers that have been sitting on the sidelines. There's a lot of sellers that have been kind of locking in and not really putting their home up on the market, and I think things are really going to shake loose and it's going to be an awesome 2026. So I'll catch you guys in my January update and in the new year. Thank you.
