Price gains flattened and the inventory of homes available for sale continued to rise in May, early signs that the gravity of higher mortgage rates might be finally starting to pull metro Denver’s housing market back to earth, according to a monthly update from the Denver Metro Association of Realtors.

There were 3,652 homes and condos available for sale at the end of May in metro Denver, which is 14% more than the number available at the end of April. More noticeable, the inventory was 76% higher than at the end of May in 2021, when the market was starved for supply.

The inventory of single-family homes available was 111.6% higher than a year ago, while the inventory of condos and townhomes was up 11.5%, an indication that higher prices are pushing buyers more toward more affordable attached housing options.

“Buyers have become more patient in their approach as the cost of money has become more expensive,” Andrew Abrams, chairman of the DMAR Market Trends Committee in comments accompanying the report. “Likewise, sellers are having to realign their expectations to sell their properties.”

Rates on a 30-year conventional mortgage have moved from around 3% at the start of the year to above 5%, according to FreddieMac. Abrams predicts the full impact of higher interest rates, however, likely won’t emerge until after the summer, and that the housing market will be a story of “two halves.”

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