Front Range Real Estate Market Update, January 23, 2026

You’ve probably heard the headline: Only 4% of U.S. homeowners are underwater on their mortgages. In Colorado? Just 1.6%. Even with foreclosures up 41% in our state during the first half of 2025, we’re nowhere near crisis territory—current foreclosure rates are less than one-eighth the 2010 peak.

The average homeowner now sits on nearly $300,000 in equity. Over the past five years, home prices climbed 49% nationally, adding roughly $141,000 in wealth to the typical homeowner.

So why does the market still feel stuck?

The Wealth Machine That Changed Everything

Let’s look at the math. A Denver homeowner who bought a $400,000 property in early 2020 with 10% down invested $40,000. Today, with home prices up 54.9% since Q1 2020, that property approaches $620,000. After five years of principal paydown, their equity position exceeds $250,000.

That’s a 525% return on their initial investment—while they were just living their lives, paying the mortgage, and watching values climb.

This isn’t a niche story. The typical seller now owns their home for a record 11 years, giving them time to build massive equity cushions through both appreciation and principal reduction. Many who bought in 2010-2015 have seen their properties double or triple in value.

The 40-to-1 Gap Nobody’s Talking About

Here’s where it gets uncomfortable:

• Median homeowner net worth: $430,000
• Median renter net worth: $11,000

That’s a 39-to-1 wealth ratio—one of the starkest divides in American economic life.

This gap hasn’t always been so extreme. But over the past five years, surging home prices while wages grew modestly have created a wealth chasm. Homeowners passively accumulated six-figure gains. Renters paid similar amounts for housing and built zero housing wealth—while watching home prices climb further out of reach.

Consider two 30-year-olds in 2020. One buys a modest starter home. The other keeps renting. Five years later, the homeowner has built $140,000+ in wealth through appreciation and principal paydown. The renter has built zero housing wealth and now faces an even more expensive market. This is what economists call a “wealth trap.” You need wealth (or access to family wealth) to enter the housing market, where you build more wealth, enabling bigger purchases that build still more wealth. Those without existing wealth fall further behind each year as prices rise faster than they can save.

The Real Problem

It’s probably controversial for real estate agents to say this, but the truth is that Denver’s housing market isn’t financially unstable—it’s structurally inequitable.

The 98.4% of Colorado homeowners with positive equity have built extraordinary wealth. The market works beautifully for them. It delivers stability, equity growth, tax advantages, and financial security.

But the same dynamics that created this wealth fortress also built walls preventing others from entering. Each year of delayed homeownership means lost equity building that compounds over time.

According to the National Association of REALTORS, buying at age 40 instead of 30 costs roughly $150,000 in foregone wealth on a typical starter home.

That’s not just money—it’s retirement security, college funding, business capital, and intergenerational wealth transfer. It’s the opportunity that homeownership has historically provided to the American middle class.

The equity fortress protects current homeowners from distress. But fortresses have walls. And those walls are getting higher.