The real estate mirage: Despite high interest rates and growing prices, Colorado still maintains population

In early 2025, headlines portrayed an exodus from the Centennial State.

The stories below the headlines pointed out that the U-Haul Growth Index ranked Colorado at 40th in 2024, down sharply from ninth in 2023. The slide of 31 spots was the nation’s highest, sparking some consternation that a correction was on the way for the housing market.

On the surface, the skyrocketing cost of real estate in Colorado aligns with the idea of negative migration. It makes sense that people have decided that it’s time to retreat downhill.

However, the data is incomplete. Collected from the one-way transactions of 2.5 million do-it-yourself movers (49.7% arriving and 50.3% departing), the U-Haul Growth Index bears little resemblance to the year-over-year reality of Colorado’s migration trends.

After an average annual influx of about 45,000 people during the 2010s, annual net migration to Colorado slipped to about 7,600 in 2020, according to estimates from the U.S. Census Bureau. It’s since grown every year and is approaching the benchmark from the previous decade in 2025.

Natural change has remained fairly static in the last five years at roughly 15,000 to 20,000 per year.

At the Colorado Department of Local Affairs, State Demographer Kate Watkins said estimates from the U.S. Census Bureau suggest that “international migration to the state was the largest driver of net migration.”

Indeed, international migration represented nearly 60% of the state’s population growth in 2024. Estimates from the Census Bureau found Colorado gained 56,154 new residents from 2023 to 2024, with 17,294 due to natural change (births minus deaths) and 38,649 from net migration, 33,227 of which were international transplants.

Watkins said State Demography Office population projections expect net migration to grow to a near-term peak of 60,203 by 2028, while natural change remains fairly static at about 17,000.

“Demand for labor in Colorado is expected to be the biggest driver of population growth,” she explained. “Job demand is expected to be fueled by economic growth and the need to fill job vacancies from a growing number of retirements as the population ages.”

The recent gyrations are nothing new. Net migration in and out of Colorado has fluctuated significantly since 1970.

“The highest single year of net migration peaked at 90,971 in 1973,” said Watkins. “The strongest decade of growth was in the 1991 through 2000, a period that averaged nearly 72,000 net-in migrants annually.

“The state experienced a period of net-out migration during the late 1980s amid the oil price collapse, which disproportionately hit Colorado’s economy,” she added. “In 1988, the state experienced its single largest year of net-out migration of 24,280.”

The continued growth in net migration has supported Colorado’s residential market in the face of elevated interest rates and increased supply.

“This past year, we had a lot more relative inventory on the market, which slowed things down a little bit,” said Cooper Thayer, Denver market spokesperson for the Colorado Association of Realtors and broker associate with The Thayer Group in Castle Rock.

“Buyers weren’t necessarily super motivated to move with where interest rates are, so things slowed down a bit, but pricing has held steady across the board, and we’re feeling pretty positive going into this year that things should remain pretty resilient to any economic uncertainty that we might see this year.”

Thayer said the dynamic remains similar to the state’s traditional norm.

“Colorado is always going to be a very desirable place to be,” he noted. “I think that we have this underlying scarcity of supply. We are underbuilt for the demand. That net desirability to be here has really upheld the market through tough times.”

The statewide median sale price increased by about 3.6% to $549,000 in 2024, as the national median increased about 2.6% to $355,000.

“In a slower, more moderating market we’re still seeing good appreciation here,” said Thayer. “Most experts will probably tell you that home price growth will slow in 2025 as we’re going to continue to feel the effects of inflation and elevated mortgage rates, but that doesn’t necessarily mean that they’re going to go negative.”

In 2025, interest rates “are probably not going to dive down this year below 6%, but they will stabilize in the mid-to-low 6% range,” he added. “Buyers, psychologically, will become more accustomed to that, because those numbers are normal. The numbers that we saw a couple years ago where you could refinance your house at 2.5%, that’s an abnormal number.”

Same goes for the anomalous in-migration decline in 2021, he added.

“Beginning in 2015, the rate of change of new population coming into the state has decreased every year, and it started to happen pretty drastically in 2021 when we saw it cut in half,” said Thayer. “There was a feeling that maybe this is the end and net migration outflows would start to pop up. The lowest net migration number we got was only 10,000 new people in 2021.”

The counterbalance of “massive spikes in pricing in 2021 and 2022” deterred some migration in recent years, but Thayer said he sees long-term positive in-migration supporting sustained growth in the state’s residential real estate market.

“We’re approaching the 6 million benchmark here,” he noted, as Colorado’s population surpassed 5.9 million in 2024. “We’re hopefully going to hit it in 2026.”

Added Thayer: “I would love to see a little bit higher numbers. The 50,000 mark (of people moving into the state) would be awesome, or to return back to those numbers that we saw in ’15, ’16, ’17 where there were over 70,000 people moving in a year. But I’m not sure if our housing construction can keep up with that.”

Most industry observers agree that construction capacity is the bottleneck.

“It’s a vicious cycle,” said Vivek Sah, director of University of Denver’s Franklin L. Burns School of Real Estate and Construction Management. “There’s oversupply from the last few years catching up, so rents have gone down, but then we stopped building again because of interest rates in the last few years, and then we’ll have continued pent-up demand and be back in the situation where there’s more demand than supply.”

While slower net migration theoretically portends slower price growth, Sah warns against looking at the aggregate picture without taking a more granular snapshot.

“It’s a demographics play,” he said. “Who is moving here, what are their jobs and how much are they making; and what about the people who are moving out? If you break that down to different demographics and by income, what you see is asymmetrical, with numbers highly positive on the higher end versus negative on the lower end.”

That means people moving to Colorado have a disproportionately high household income, with the outbound group more likely to have a lower household income. Sah points to a 2024 analysis of IRS data by the Cato Institute that found 1.16 households with incomes of $200,000 or more moved into Colorado for every such household that migrated away to another state as of 2022.

The creation of “high-quality, high-paying jobs” is the ultimate catalyst for in-migration,” said Sah. “We are still seeing a high positive on people who are making a certain income level and above moving here.

“Long-term, I’m very bullish on Colorado as a state,” he added, citing the “balanced economy” that isn’t inextricably tied to the fate of a single industry. “I think our biggest competition is Texas, Dallas and Houston and some other cities there that continue to see great in-migration because the cost of living is really, really cheap and they can expand in all directions.”