As published in DMAR Market Trends, September 2026

Buyers with the right mindset may benefit from getting into the market this fall. Negotiating power has improved as rates have increased.

The City of Denver scaled back a proposal that would have allowed for “missing middle” housing development across the city.

Denver Water’s reservoirs were only 67% full as of September 28, compared with 91% normally. Beginning October 1, lawn watering and spray irrigation will be prohibited. Denver Water has been under Stage 1 drought restrictions since March—the first Stage 1 declaration since 2013. Water availability and landscaping costs could increasingly influence how buyers view large lawns, irrigation systems and xeriscaping, while sellers may need to rethink how they maintain curb appeal during restrictions. Keep in mind that different metro-area water districts have different rules.

Projects being planned on the eastern edge of Aurora could add a total of 3.1 million square feet of data center space across approximately 576 acres and bring hundreds of millions of dollars in investment to the area.

Moving to a smaller Colorado town no longer guarantees more affordable housing. A recent LendingTree study found that median home prices in communities such as Cañon City, Montrose and Fort Morgan now rival those in much larger cities across the country. In fact, homes now cost more in Cañon City than in Chicago, the nation’s third-largest city, according to LendingTree. Increased demand, including from buyers commuting to Front Range employment centers, may be contributing to rising prices. Overall, affordability challenges are reaching well beyond Colorado’s major metro areas.

Colorado’s job market is starting to soften. Colorado lost 1,400 jobs in August, unemployment rose to four percent, and labor-force participation dropped to 65.3%—the lowest level on record dating back to 1976. A softer job market could keep some buyers and sellers on the sidelines, adding to the slower transaction environment we’ve already been seeing.

The University of Colorado System will relocate more than 600 employees to Independence Plaza in downtown Denver in 2027, consolidating from its North Capitol Hill headquarters. CU Denver will host a regional innovation and entrepreneurship hub in 30,000 square feet of the building in partnership with the city, backed by $6 million in public funding, including $4.5 million from the Denver Downtown Development Authority and $1.5 million from Denver Economic Development and Opportunity.

Denver-based Crusoe closed a $3.9 billion Series F funding round backed by about 108 investors. The artificial intelligence infrastructure company will use the capital to scale its data center development. Crusoe builds and operates data center campuses for OpenAI, Microsoft and Oracle and manufactures modular data center units at a factory under construction in Brighton.

Metro Denver absorbed 6,760 apartment units in the second quarter, the strongest quarter since 2020, according to Northmarq. Deliveries totaled 5,236 units in the first half of 2026, down 30% from the same period last year, with about 10,000 units expected for the full year compared with an annual average of 14,000 from 2021 to 2025. Another 24,797 units are under construction.

Real estate is a confidence game, too. A buyer may technically be able to afford a home and still decide not to buy if they’re nervous about their job or the economy. Lower confidence could help explain why buyers remain cautious even as more homes become available.

HOA surveillance cameras are becoming a new consideration for homebuyers, with some viewing them as a security benefit and others as a privacy concern. HOA documents often don’t clearly disclose how the technology works, who controls the data or how it may be used.

Millennial buyers are moving away from oversized lawns, formal dining rooms, plush carpet and other once-premium features. They’re favoring flexible spaces, low-maintenance outdoor areas and homes that feel practical rather than showy.

Large housing and real estate industry groups have joined forces for the “Let America Build” campaign, seeking to educate the public about housing supply constraints and encourage action on zoning and other regulatory reforms aimed at improving the affordability of new home construction.

MORTGAGE NEWS

According to Cotality’s Consumer Sentiment Report, the “magic mortgage rate” that would move the majority of buyers across generations into the market is 4.6%.

The Federal Reserve’s September 2026 Summary of Economic Projections raised its 2026 GDP growth forecast to 2.3% and its core inflation projection to 3.4%, while lowering its year-end unemployment forecast to 4.1%. The outlook for monetary policy also shifted, with the projected federal funds rate at 4.1% for 2026, up from 3.8% in June. Rates are projected to remain elevated at 4.1% in 2027 and 3.9% in 2028.

Consumer confidence hits a 12-year low. Consumer confidence fell 6.7 points to 81.9 in September, its lowest level since 2014. Consumers are increasingly concerned about prices, jobs and the direction of the economy.