Michael RushReal Estate Broker, Keller Williams Realty DTC · Real Estate Broker at Keller Williams Realty DTC

❄️ January 2026 | Colorado Housing Market Update 📊

29 Jan 2026 · 3 min

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2:50

In this market update, the presenter highlights the upcoming Federal Reserve chair transition as a key driver for the 2026 housing market, discussing the leading candidates—Rick Rieder, an asset‑management veteran likely to prioritize liquidity and rapid market response, and Kevin Warsh, who may ease restrictions once inflation eases, supporting mortgage‑rate stability and affordability. The speaker forecasts modest home‑price appreciation of 2‑3% while noting that wages are projected to outpace price growth for the first time since before the pandemic. The One Big Beautiful Bill Act, which raises the low‑income housing tax credit by 12%, is expected to spur a wave of affordable rental and multifamily construction. Demographic shifts, such as baby‑boomers moving closer to family, are weakening the “lock‑in” effect, with proximity to friends and family now the top reason for moves. Regionally, Colorado’s Front Range shows inventory rising and demand softening in line with seasonal expectations, though Denver experienced a slight supply decline and Colorado Springs saw a surprising demand increase, leaving overall month‑supply roughly flat or marginally down year‑over‑year.

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2025 ended as the weakest year for job growth since 2020, and there's another major variable to watch for 2026. What is it? Let's find out. Let's talk about something that could have a major impact on the housing market in 2026: a new Federal Reserve chair. This has a larger impact than most people realize because it influences bond markets, liquidity, risk tolerance, affordability, and buyer and seller confidence. Rick Rieder is the current front-runner, and he comes from an asset management background. Rick will most likely focus on liquidity and capital flows, preventing financial stress from breaking the market. This matters for real estate because he may be able to step in faster when he notices shifts in the market, which could bring more stability to lending conditions. Kevin Warsh is looking like the runner-up, and he is known as someone who is less inclined to keep policy overly restrictive once inflation is moving in the right direction, which would mean stability in mortgage rates and a push towards affordability. For now, this low-hire environment is keeping the Fed on a path of gradual rate cuts. Combine that with home prices expected to appreciate in a modest 2 to 3% range, And we have a unique moment. Wages are actually expected to outpace home price growth for the first time since before the pandemic. We are also likely to see a boost from the One Big Beautiful Bill Act, which increases the low-income housing tax credit by 12%. This is expected to trigger a wave of new affordable rentals and multifamily construction. The lock-in effect is also starting to crack. Life happens— marriages, new babies and grandbabies, are finally pushing baby boomers to move closer to family. In fact, being near friends and family is the number one reason why people move, finally outweighing the desire to cling to a 3% interest rate. So much is happening, and while a lot depends on the next Fed chair, the market is finally moving again. Here's what we are seeing along the Colorado Front Range. Inventory is up and demand has dipped, which is exactly what we expect for December and January. However, Denver and Colorado Springs were the outliers, Denver actually saw a slight decrease in supply, while Colorado Springs saw a surprising bump in demand. Overall, our month's supply of inventory remained flat or saw a minor decrease compared to last year. Thank you guys for tuning in, and I'll catch you on the next market update.