Colorado Springs-area home sales that have slumped in 2024 largely because of higher mortgage rates could rebound next year under a new Trump administration as economic conditions improve, borrowing costs moderate and demand for housing increases, one longtime real estate agent predicts.

“Some people are going to say, ‘well, maybe it’s time to think about buying a house now,’” said Harry Salzman of Salzman Real Estate Services and ERA Shields Real Estate, referring to Donald Trump’s second term after the former president’s reelection Tuesday. “So I think we’re going to see people off the sidelines, and they’re going to be coming back into the market sooner than before he got elected.”

A new market trends report released this week by the Pikes Peak Association of Realtors shows that single-family and patio home sales in October totaled 998, a 17.3% increase over the same month last year.

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But October’s year-over-year gain in sales was one of the few increases this year.

Through the first 10 months of 2024, home sales totaled 9,732 or a 5.1% decline from the same period last year, the Realtors Association report shows.

Without a surge in buying and selling activity over the final two months, home sales in 2024 are likely to decline on an annual basis for the third consecutive year, according to Realtors Association figures and historical data maintained by The Gazette.

Buyers who are looking, however, should have a greater selection of homes to choose from; the supply of properties for sale rose to 3,394 in October, a 35.5% increase compared with the same month last year, the Realtors Association report showed. It was the 10th straight increase in monthly inventories and the highest total since 3,409 in July 2015.

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This year’s slowdown in sales in Colorado Springs, like in other markets, continued a trend that began after a sharp increase in long-term mortgage rates two years ago.

At the start of 2022, 30-year, fixed-rate mortgages averaged 3.22%, according to mortgage buyer Freddie Mac. Rates rose throughout that year as the Federal Reserve hiked borrowing costs to tamp down spiraling inflation.

By the end of 2022, long-term mortgages had risen to 6.42%, and remained above 6% and even topped 7% in 2023.

This year, rates continued to exceed 6% and again ticked above 7% at times. On Thursday, after six straight weeks of increases, 30-year, fixed-rate mortgages averaged 6.79% nationally, which was the highest since early July, according to Freddie Mac.

“We’ve got buyer prospects on the sidelines, waiting for interest rates to come down,” Salzman said.

That could happen in 2025, according to some predictions.

A compilation of mortgage rate forecasts last week by U.S. News & World Report, for example, shows that Wells Fargo & Co. expects 30-year, fixed-rate mortgages to average 5.74% next year, while the National Association of Home Builders forecasts a rate of 5.86%. The Mortgage Bankers Association predicts a rate of 5.8% by the end of 2025.

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If rates fall below 6%, expect a jump in buyer demand, Salzman said.

“I just think people are going to accept the fact that we’re never, ever going to see 2½% or 3½% again. Forget that,” Salzman said of historically low long-term mortgage rates that buyers enjoyed for much of 2020 and 2021.

“What’s reasonable is going to be if we can hit mid 5% or otherwise it might be around (5¾%). But it’s going to make a big difference from where we are now and where we have been.”

On top of lower rates, Salzman suggested that a Trump administration could mean better times for the housing market. Wednesday’s stock market rally was one sign of bullishness by the business community, he added.

“I think it’s going to be positive,” Salzman. “The reason I say the housing market is going to be positive is that people can visualize the fact that the job market is going to be positive. There’s going to be corporate growth. And when we have the corporate growth, people are going to get a raise. And when people get a raise, maybe they’ll have more dollars to have that upgrade of a house.”

But an increase in demand also could mean a spike in home prices in 2025.

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Median prices for Colorado Springs-area homes that sold in October stood at $475,000, a 2.1% decline from the same month last year, the Realtors Association’s market trend report showed.

Despite last month’s drop, Springs-area median prices had climbed for 13 straight months on a year-over-year basis.

Even if prices begin to rise, Salzman expects them to remain at about 6% next year, which he said would be in keeping with annual historical averages over the last roughly 40 years in the Colorado Springs area.

“Depending on any economic cycle, up or down or flat, appreciation of a house has been at, like, 6.2% forever,” Salzman said of local annual price increases.

“No doubt, we’ll probably be going higher than what we are today … but next year I feel we’ll be back to that. That’s average. That’s typical.”