After a slow end to 2025 for Colorado's Western Slope housing markets, sinking mortgage rates are multiplying inquiries from interested buyers -- but they're not enough to have a tangible impact on the market just yet.
Consistent with 2025 trends, the latest Market Trends Housing Report from the Colorado Association of Realtors shows higher inventory levels, longer days on market and cost-sensitive buyers. Real estate agents in Colorado's rural mountain towns have pointed to a growing buyer's market since the second half of 2025, as the sidelining of potential buyers amid economic uncertainty has boosted their negotiating power.
Despite buyers facing less competition and having more time to weigh their options, last year was a quieter year for ski town markets. Now, as the state welcomes easing mortgage rates, some lenders are reporting growing interest from first-time homebuyers.
"There's definitely been more inquiries on it for the purchase market," said Bob Casals, broker-owner with Casals Financial Inc. "It goes in waves, but I've been seeing a little bit more activity with first-time homebuyers. Whether or not they can qualify and get into a home is a little different and can be more challenging."
Mortgage rates trended downward throughout much of 2025. When home loan rates hit their lowest point in nearly three years in early January 2026, the Colorado Association of Realtors said sentiment had improved among buyers who "had been sidelined by affordability concerns."
"Buyer sentiment is the market has shifted, and this interest rate trend has served to increase the financed buyer pool," Matthew Starr, the owner and managing broker of Astralis Real Estate in Rifle, said in an email. "A small rate move often matters more at our higher price points."
As of Feb. 2, the national average on a 30-year fixed-rate mortgage is 6.16%, according to Bankrate. Although rates are slightly up from mid-January, they're lower than what the country saw throughout most of 2025, during which the average 30-year fixed-rate mortgage reached above 7%.
In early 2022, the average 30-year fixed rate was 4.72%, reaching a peak of 7.79% in 2023, according to reporting by the Wall Street Journal. Between then and 2025, rates largely fluctuated in the 6% range, falling as low as 6.08%.
With rates at a three-year low, Colorado's mountain towns could eventually see impacts to the region's home affordability issue, though these benefits will likely hit the Denver Metro area long before they reach the mountains. This is primarily due to a shortage of available housing for purchase in some resort towns like Aspen, Snowmass, Breckenridge, Vail, Steamboat Springs and Glenwood Springs.
"Given that mortgage interest rates do have a sizable impact on monthly payments, it is accurate to say that lower mortgage rates will allow for buyers with lower incomes," DJ Summers, director of communications and research operations at Common Sense Institute, said in an email. "However, mountain counties have a different problem than Denver-metro markets. ... In areas where there are fewer homes available generally, interest rates may not create a lot of movement."
Casals, based in Grand County, said he has been working with more first-time homebuyers across Summit, Routt and Grand counties. He said the uptick in inquiries he's received from interested buyers is largely due to the news coverage surrounding lowering mortgage rates, but that the tangible impacts are lagging behind.
"When you price it out, it really isn't as good as they thought," Casals said. "(Mortgage rates) have crept up a little bit again, but we're still making it through."
Although buyer activity was softer over the summer than impervious years, that doesn't mean interest itself was softer. Whether due to their own economic circumstances, current events or general economic anxieties, a large portion of potential homebuyers had chosen to watch from the sidelines for market conditions to improve.
Starr, for example, said he has added three new buyer clients since the beginning of the year who were sitting on the sidelines through 2024 and 2025.
Other recent inquiries from buyers, Casals said, have come from mountain residents that had already undergone previous attempts at purchasing a home.
"I've picked up a couple buyers that actually were looking into it a while ago and they decided against it, but now they are back in the market for various reasons," he said. "Interest rates are one of them, a few of them were in leases."
In addition to lower mortgage rates, interested buyers returning for their second round of house hunting are finding more seller concessions and opportunities for negotiation. Casals said he's heard back from buyers that were surprised to see their counter offers go forward.
The increased willingness of sellers to negotiate is a direct reflection of slower market conditions rather than lower interest rates, Casals said, though the combination of the two is what has given some sidelined buyers the confidence to re-enter the market.
Still, price sticker-shock continues to dominate rural markets.
"Buyers and sellers want to see a (new) rate stick for several weeks, not just bounce around," Starr said. "The affordability headwind doesn't disappear with a small rate dip. Inventory grows more above $500,000 while under $500,000 is where most buyers qualify, so behavior won't shift much unless the available inventory matches what buyers can buy."
Casals, who also works with buyers on the Front Range, said both have been trending toward a buyer's market in 2026 despite slower activity within mountain markets.
"I wouldn't say totally a buyer's market, but the sellers are willing to negotiate a little bit more than previously," he said. "It wasn't too long ago that there were multiple bids on properties and (buyers) outbidding each other. That's definitely gone away."
If mortgage rates continue to fall throughout 2026, it will likely increase Colorado's buyer pool, weakening the buyer's market formed throughout 2025. Increased buyer interest can also shorten decision cycles, meaning more showings, more offers and faster absorption, Starr said.
"If rates drift lower through 2026, I'd expect the market to feel less like buyers have all the cards and more like a segmented market. Well-priced, well-located homes tighten up quickly, while anything overpriced still has to compete hard," he said. "Ultimately, buyers have more choices. Sellers who prepare and price correctly still win."
For now, Western Slope submarkets have been on the lower end of new listings, Starr said. Impacts from lower mortgage rates might not appear until the "inventory boom" that typically accompanies the arrival of spring and summer markets.
This closing lag between decreased mortgage rates and increased buyer interest means a buyer's market might not be around for long. For those already considering it, now is an "excellent time to buy," Casals said.
"Down the road, there could be three or four people looking at that same property as the interest rates go lower," Casals said. "If you can afford it and you're looking at it now, let's go forward."
The Federal National Mortgage Association's national outlook for 2026 predicts rates could drop to 6% in the second quarter and stay there for the rest of the year. Meanwhile, the Mortgage Bankers Association forecasts interest rates will remain around 6.1% for the year.
Perceptions about economic conditions and fiscal policy, such as tariffs, can also impact how much risk lenders feel comfortable taking on.
This story was made available via the Colorado News Collaborative. Learn more at: