DENVER (KDVR) — U.S. monetary policy is cooling the Denver metro real estate market somewhat, but the area is still far from affordability or a healthy inventory.

In response to record inflation levels, the U.S. Federal Reserve has been raising interest rates through the first half of 2022, ending a two-year stretch of some of the easiest monetary policies in national history. Mortgage rates have not spiked so high so quickly since the 1970s, ending May with an average rate of 5.23% for a 30-year fixed-rate mortgage.

Colorado’s housing market has responded. Prices have stalled and inventory climbed through the late spring and early summer months.

Home prices are still higher than they’ve ever been, but they have softened. The median sales price for a single-family detached home peaked in April at $680,000 after climbing every month since the year began.

Similarly, inventory has grown since the beginning of the year. In January, the Denver metro area had only 1,719 new listings for single-family homes. In June, it had 5,674.

The Denver market’s competitiveness is no longer at the delirious stages it once was, according to Nicole Rueth, producing branch manager and SVP of The Rueth Team of Fairway Mortgage. Home sellers cannot command the prices they did when inventory was at its lowest.

“Buyers are using discernment,” said Rueth. “If they think that home price is too high, then they’re going to ignore it. And we’re seeing that. We’re seeing a lack of showings, we’re seeing a lack of offers and we’re seeing longer days on market for those homes that come out wanting whatever their neighbor sold for last week or last month.”

Still, Rueth says the market is still firmly a seller’s market. A healthy housing market should have between four and six months of inventory. Even with five times the housing inventory of January, the Denver metro still only has roughly one months’ worth of inventory. While prices have eased, Rueth said she does not expect any kind of bubble to burst in Colorado’s future.