Colorado Springs-area home sales saw a slight increase in the first month of the year, though the local housing market generally remains slow as mortgage rates that are at roughly 20-year highs continue to keep buyers on the sidelines, some industry experts say.

“We’re still very much in kind of the doldrums here,” said Rick Van Wieren, a real estate agent with Re/Max Properties in the Springs. “The pendings (pending home sales) don’t look to me like they’re going to … be any kind of dramatic breakout yet.”

A Pikes Peak Association of Realtors report released this week shows single-family and patio home sales totaled 696 in January, a 4.2% bump over the same month last year. It was the fourth straight month that sales rose on a year-over-year basis.

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Aside from that gain, last month’s sales were at a 10-year low — the fewest for any January since 636 sales in January 2015, according to historical data maintained by The Gazette and based on Realtors Association figures.

Likewise, home sales totaled 11,503 in 2024, falling to their lowest point since 11,197 in 2014, Gazette records show.

The sales slowdown in 2024 represented a sharp turnaround from the frenzied home buying and selling of four to five years ago.

During those years, 30-year, fixed-rate mortgages that had fallen to the neighborhood of 3% and below fueled a surge in home buying and selling in the Pikes Peak region and other markets nationwide.

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But long-term mortgages climbed in the second half of 2022, after the Federal Reserve hiked interest rates in an effort to slow inflation.

By the end of that year, mortgage rates had risen to a national average of well over 6%, according to mortgage buyer Freddie Mac.

Since then, 30-year, fixed-rate mortgages have remained high, surpassing a national average of 7% during portions of 2023 and 2024 and most recently hitting 7.04% on Jan. 16, Freddie Mac figures show.

“With interest rates having gone up steadily over the last several years, we’re in a just more sluggish time,” Van Wieren said. 

Not only have sales cooled, but it’s taking longer to sell a home.

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Figures maintained by Van Wieren show homes spent a median 48 days on the market in January before selling, up from 39 days in January 2024. When the market was red hot in 2020, 2021 and the first half of 2022, median days on the market before homes sold typically were in the low single digits.

On Jan. 30, long-term mortgage rates dipped for the second straight week and trickled down to 6.95%, according to Freddie Mac.

Rates at 6.95%, however, are the equivalent of 7% in the minds of many buyers and causes them to hold off on home purchases, Van Wieren said.

Yes, some real estate industry members say buyers can purchase now and refinance their mortgages later when rates drop, but some can’t afford to make those higher payments in the short term, he said.

“When you start running payment calculators and look at what the difference is in your payment when you’re at 6.9% vs. 6.25% or 6%, it’s pretty substantial,” Van Wieren said. “And that will be the difference between people being able to afford a house sometimes and people not being able to afford a house.”

Prices, meanwhile, eked out gains in January, despite the market softness.

The Realtors Association report showed the median price of homes that sold last month was $482,250, a 7.2% increase over January 2024.

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The inventory of homes for sale totaled 2,514 in January, up nearly 44% from the same time last year, according to the association’s report.

But even with more choice, mortgage rates will continue to determine whether some buyers will take the plunge on a home, Van Wieren said.

“If we can get below 6% at some point, I think that’s going to make a substantial difference,” he said. “But even getting closer to 6% would definitely help.”