The U.S. economy and the Colorado Real estate market in 2026: What is it going on in this new year and what do Industry experts predict?
Below are a few Key Points that recap what is going on or predictions of the industry: :
National:
Trade deficit increased in November 2025
The US trade deficit in goods and services grew to $56.8 billion in November, up 95% from the prior month, according to the Commerce Department. Imports reached $348.9 billion, up 5%, while exports declined 3.6%.
World Bank: US may be seeing increase in potential growth
The US economy might be experiencing a sustained increase in its potential growth rate, the World Bank suggests. The bank estimates that the US economy grew 2.1% in 2025 and has averaged 2.6% expansion since 2022, above the rate from the prior decade. The potential growth rate reflects how fast the economy is able to grow without spurring additional inflation
The S&P 500 currently trades at 22.1 times forward, a valuation that has historically correlated with negative returns in the next two years.
Among 19 Wall Street analysts, the S&P 500 has a median year-end target of 7,600, which implies 10% upside from its current level of 6,950.
Fed holds interest rates steady at end of January 2026 meeting
On Jan. 28, 2026, the Federal Reserve left interest rates unchanged at the end of its meeting this week after three reductions in 2025. Chair Jerome Powell noted that the economic outlook "has clearly improved since the last meeting," and the Fed also pointed to signs of stabilization in the job market. "While a lower base rate is always welcome, the cumulative impact of late 2025's cuts has already jump-started the real estate cycle," said Allan Swaringen, CEO of JLL Income Property Trust.
The average rate on a 30-year fixed mortgage rose to 6.24% on Jan 23rd, marking the first rise in a month, according to the Mortgage Bankers Association. Meanwhile, applications to refinance declined 16% and applications to purchase dipped 0.4%.
Housing market: Homebuyers are canceling purchase agreements at the highest rate since tracking began in 2017, with 16.3% of contracts falling through in December amid elevated housing costs and increased inventory, Redfin reports. A separate Redfin report indicates that there were 47% more sellers than buyers in the market in December.
Prologis sees greater focus on supply chain adaptability in 2026
Melinda McLaughlin, Prologis' global head of research, joined the REIT Report podcast to discuss the performance of international logistics markets and the impact of e-commerce on leasing demand. Predictions are that industrial is on the mend after a period of overbuilding since 2020.
NAREIT Report: Nareit's Ed Pierzak and John Barwick unpack the major themes shaping the 2026 REIT Outlook. Two key divergences are apparent -- between REITs and broader equities, and between REITs and private real estate -- that may create meaningful opportunities for outperformance, supported by strong balance sheets and improving transaction activity in 2025.
Colorado:
In 2025, CHFA (Colo Housing Finance Authority) invested $2.9 billion to advance homeownership, affordable rental housing, business lending, and community partnerships across the state.
475 businesses and nonprofits access capital, with more than $122 million invested through CHFA’s business lending programs, supporting 2,814 jobs statewide.
5,491 households achieve homeownership, supported by $2.0 billion in first mortgage loans and $86 million in down payment assistance.
5,732 affordable rental housing units to be developed or preserved, supported by $555 million in total loan production and awards of federal and state Housing Tax Credits.
U.S. office sales have increased 40% year-over-year, signaling a cautious but meaningful return of investor confidence across select national markets. Amidst this recovery, Denver has emerged among the top-performing metros, recording a dramatic 115% year-over-year increase in transaction volume - a surge that far outpaces the national average.
Heading into the 2026 Colorado legislative session, commercial real estate organizations are bracing for a tight budget year and conversations about zoning, energy regulations, labor rights and data centers. Governor Polis is in his last year as governor and CRE organizations have signaled that their goal for this session is to prevent new bills that will increase costs and barriers to building, while advocating for bills that support growth. An old quote from a CRE expert years ago rings true again today: “it seems like when there are state budget deficits, commercial real estate seems to be an easy target to help fill some of the empty bucket. Let’s hope that the legislature would be wise enough to understand the distress that the market has and is still currently caught up in.”
And last but not least, the Denver Broncos announced that they plan to build a stadium at Burnham Yard, a dilapidated former railyard in the Lincoln Park neighborhood owned by the state. LLCs affiliated with the Broncos have spent at least $146 million to purchase at least 10 properties near Burnham in the past year, as BusinessDen first reported in June. Their multibillion-dollar decision will reshape an industrial stretch of the city just a mile southeast of the current stadium.
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