Why the Southern Colorado Housing Market Is Set for a Comeback in 2026

After a period of relative stagnation in 2024 and 2025, all signs point toward a meaningful rebound in the U.S. housing market next year — and Southern Colorado is well positioned to benefit. Whether you’re a buyer, seller, investor, or homeowner planning your next move, understanding the forces driving a 2026 comeback can help you make smarter real estate decisions.

1. A National Recovery Is Underway

According to the National Association of REALTORS® (NAR), the broader U.S. housing market is expected to see a significant uptick in activity in 2026. NAR chief economist Lawrence Yun forecasts a double-digit increase in home sales, with robust growth in both existing and new residential transactions. Nationwide home prices are also expected to rise modestly, supporting homeowner equity without pricing buyers out of the market entirely. 

This national momentum often trickles down to regional markets like Southern Colorado, especially those with solid economic fundamentals.

2. Mortgage Rates Are Easing — Helping Buyers Jump Back In

One of the biggest barriers to homebuying in recent years has been high mortgage rates. However, many forecasts project that rates will settle in the low-6% range or possibly dip below 6% by 2026. This trend slowly improves affordability and encourages buyers who’ve been sitting on the sidelines. 

For Southern Colorado buyers, even modest rate relief can unlock more purchasing power — especially in markets outside of Denver where home prices are lower.

3. Southern Colorado’s Fundamentals Still Look Strong

Unlike some coastal or high-priced metro areas, many parts of Southern Colorado — including Colorado Springs and Pueblo — still offer relative affordability while benefiting from steady population growth and job creation.

Colorado Springs: Balanced Market Conditions

Data shows growing inventory and longer days on market in Colorado Springs — signaling a shift from a frenzied seller’s market to a more balanced one. More choices and negotiation opportunities for buyers often precede increased activity and price stabilization. 

Pueblo: Rising Rental Demand and Economic Diversification

Pueblo has seen notable increases in rental rates and investment activity, backed by new business investments and downtown revitalization projects — factors that help keep housing demand resilient even when sales slow. 

4. Inventory Trends Give Buyers More Leverage

A common theme across national forecasts is the slow but steady rise in housing inventory — especially as price growth cools and sellers adjust to current market conditions. A modest increase in supply means buyers have more choice and negotiating leverage, which can stimulate market activity. 

In Southern Colorado, this rising inventory — paired with moderate pricing and steady demand — creates a more balanced market that can attract both first-time and relocating buyers.

5. Affordability Is Improving — A Key Factor for 2026

While housing remains out of reach for some buyers, 2026 may mark the first year since the post-pandemic boom where affordability begins to improve noticeably. Indicators include:

• Slower home price growth compared with inflation

• Mortgage payments are consuming a smaller share of income

• Stable jobs and rising wages in many regions
  These trends help more people qualify for homes and re-enter the market. 

Southern Colorado’s median home prices — which have historically been lower than Denver’s — amplify the impact of this shift.

Conclusion: A Strategic Turning Point for Southern Colorado Real Estate

2026 isn’t expected to deliver a dramatic boom — but it is shaping up to be the year the housing market finally gains forward momentum after years of high rates and limited affordability. For Southern Colorado, the combination of:

• increasing home sales

• more balanced inventory

• slightly lower mortgage rates

• strong local economic drivers

adds up to a compelling narrative: the housing market is heading toward a steady, sustainable comeback.

If you’re thinking about buying, selling, relocating, or investing in Southern Colorado real estate, 2026 could offer opportunities you haven’t seen in years.

If you want, I can tailor this article for a specific audience (e.g., first-time buyers, retirees, or investors) or add local data points like recent price trends in Colorado Springs or Pueblo.

2026 isn’t expected to deliver a dramatic boom — but it is shaping up to be the year the housing market finally gains forward momentum after years of high rates and limited affordability. For Southern Colorado, the combination of:

• increasing home sales

• more balanced inventory

• slightly lower mortgage rates

• strong local economic drivers

adds up to a compelling narrative: the housing market is heading toward a steady, sustainable comeback.

If you’re thinking about buying, selling, relocating, or investing in Southern Colorado real estate, 2026 could offer opportunities you haven’t seen in years.