For many homebuyers — especially first-timers and those moving from other states — Denver’s housing market often feels too expensive. Even though prices have cooled compared to the red-hot pandemic years, the reality of affordability in Denver still leaves many buyers feeling priced out. Let’s break down why.
1. Home Prices Still Well Above National Norms
Even as the market softens, Denver’s median home price remains significantly higher than the U.S. average. Recent data shows Denver’s median sales price around the mid-$500,000s — roughly 29% higher than the national average — and prices only slipping modestly year-over-year.
That means homebuyers in Denver need more income, larger down payments, and greater monthly payments to compete in the market — a high bar that many local and out-of-state buyers struggle to clear.
2. High Mortgage Rates Make Buying Even Harder
Home prices alone don’t tell the whole story. The real cost of buying a house is your monthly payment — and with current mortgage rates higher than the historic lows of recent years, buyers are paying significantly more each month for the same price.
For example, a house that was affordable at 3% interest suddenly becomes much less so when rates are closer to 6–7%. That jump in monthly payments often pushes buyers into smaller, less desirable homes or out of the ownership market entirely.
3. Rising Inventory, But High List Prices Persist
Inventory has finally increased after years of constrained supply — giving buyers more options and negotiation leverage. Listings have climbed to levels not seen in over a decade.
However, many sellers continue to price homes based on the peak-pandemic mindset, not current demand realities. Research shows a large percentage of listings eventually see price reductions — a sign sellers may be overestimating what buyers are willing to pay.
This disconnect contributes to the “overpriced” feeling: buyers see a lot of homes, but too many don’t match how much they can actually afford.
4. Local Incomes vs. Local Prices: A Tough Balance
Housing affordability is not just about prices — it’s about how home prices align with local incomes. Even with Denver’s relatively strong job market, incomes haven’t kept pace with what it costs to buy a median-priced home. According to statewide housing forecasts, mortgage payments for a median-income household have climbed as a percentage of income compared to recent years.
That means even if a buyer technically qualifies for a loan, it strangles disposable income and affordability — leading to delays, downsizing choices, or even abandoning plans to buy altogether.
5. Buyer Sentiment Matches the Data
Anecdotes from local homebuyers reinforce the statistics. Many buyers describe Denver as “one of the most overvalued markets in the country,” noting that price-to-income ratios and market competition once favored sellers much more than buyers.
For some, this has meant longer search times, more negotiation, and homes sitting on the market as sellers adjust to buyer expectations.
Is Denver Still Worth Buying In?
Here’s the nuance: being overpriced doesn’t mean it’s a bad long-term investment. Denver remains a desirable place to live — with strong job growth, amenities, and quality of life that attract buyers from across the country. However:
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Affordability challenges are real — both in purchasing and monthly carrying costs.
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Prices remain elevated vs. national norms, even with some cooling.
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Buyers often need to compromise on location, size, or type of home to make ownership feasible.
Many buyers are now pivoting to condos, townhomes, or nearby suburbs — or taking advantage of larger inventories and negotiation power while prices are stabilizing.
Final Thought
Denver’s housing market has evolved. Prices aren’t skyrocketing like before, but they are still high relative to income, borrowing costs, and national averages. For buyers asking why it feels overpriced, the answer is a mix of persistent premium pricing, higher mortgage costs, and an imbalance between demand and what local budgets realistically support.
If you’re navigating the Denver market in 2025 or beyond, education + strategy = power. Study trends, leverage growing inventory, and know your budget limits before you make an offer.
