Mortgage Rates vs. Buyer Demand (Denver + Boulder): The Data Behind the 6% and 7% Thresholds

If you’ve been in real estate the last few years, you’ve felt it in your bones:
When mortgage rates drop, buyers show up.
When rates spike, buyers disappear (or at least hesitate).

But here’s the question I wanted to answer with actual numbers:

Is there a measurable relationship between mortgage rates and home sales—and are there “thresholds” where buyer behavior changes?

Turns out: yes. And the data are pretty loud—especially if you’re buying or selling on the Colorado Front Range (Denver Metro + Boulder County), where micro-markets can flip fast when demand changes.

The Big Picture (June 2022 – November 2025)

Using average 30-year fixed mortgage rates and existing-home sales activity (seasonally adjusted annual rate), the relationship shows a strong negative correlation of -0.65.

Translation: as rates go up, sales go down—and not in a subtle way.

Rates aren’t the only factor (inventory, consumer confidence, seasonality, and local job growth matter too). But rates are one of the cleanest “master levers” we can observe in real time.

The Two Mortgage Rate Thresholds That Matter Most: 6% and 7%

In the data, two levels show up over and over as “behavior change” points:

6.0% = the “buyers start leaning in” threshold
7.0% = the “buyers start backing away” threshold

Not because buyers do math differently at 6.99% vs 7.01%… but because humans are humans.

Why thresholds matter

Most buyers don’t live in spreadsheets. Most buyers live in feelings:

“This feels doable.”
“This feels expensive.”
“Let’s wait and see.”
“We might miss out.”

Rates influence those feelings fast.

The Chart (This Is the Whole Story in One Picture)

How to read this chart (quickly)

The blue line is the average 30-year fixed mortgage rate.
The green line is the existing-home sales activity (SAAR).
When the blue line rises, the green line generally falls (and vice versa).
The dashed lines at 6.0% and 7.0% show the two “psychological thresholds” where buyer behavior tends to shift.

Data sources: Freddie Mac PMMS (30-year fixed) and NAR Existing Home Sales (SAAR).
https://www.freddiemac.com/pmms
https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales

What the Data Shows (in plain English)

When you group the period into rate “zones,” the pattern becomes clear:

1) Below 6.0% = The “Sweet Spot”

When rates were below 6.0%, existing-home sales averaged about 4.91M (annualized).
That was the highest activity zone in the dataset.

2) 6.0% to 6.5% = The “Active Buyer Zone”

When rates were in the 6.0%–6.5% range, sales averaged about 4.15M.
Buyers are still active here—just more price-sensitive and more selective.

3) 6.5% to 7.0% = The “Steady (but Cooling) Zone”

In the 6.5%–7.0% range, sales averaged about 4.11M.
The market still moves here—but fewer people are thrilled about it.

4) Above 7.0% = The “Slowdown Zone”

When rates were above 7.0%, sales averaged about 3.88M.
That’s roughly 19% below the sub‑6.0% “sweet spot.”

A Real-World Example: The 2022 Rate Spike

From mid‑2022 into late‑2022, rates climbed quickly (roughly 5.8% to ~6.9%), and sales dropped from about 5.12M to ~4.02M annualized.

That matches what we all saw on the ground:

• fewer showings
• longer decision cycles
• more price reductions
• more “we’re going to pause until things calm down”

What This Means for Buyers (Denver + Boulder)

Here’s the part most buyers miss:

You don’t have to sprint at every house—just the shiny pennies.

When rates are in that 6.0%–6.5% zone (like they’ve been recently), you often get this split:

• the best homes still create competition
• the average homes sit longer and become negotiable

So the strategy is simple (not easy, but simple):

• Move fast on the rare home that checks the boxes.
• Negotiate hard on the ones that don’t.

And if rates drift closer to 6.0%, expect more buyers to re-enter at the same time—meaning fewer “easy” deals.

What This Means for Sellers (Including Expired Listings / Relistings)

Rates don’t just affect buyers. They affect how picky buyers get.

When rates are higher:

• buyers are more sensitive to condition
• buyers negotiate harder
• buyers punish uncertainty (“this feels like work”)
• the gap between HGTV-ready and “average” widens

So, if you’re selling in a rate environment that’s not sub‑6.0% magic, you have one job:

Be the shiny penny.

Because when inventory is up and buyers are cautious, the best-prepared and best-positioned home wins.

The Takeaway (Real Estate Scientist Version)

Rates aren’t everything—but they’re a reliable signal.

Below 6.0%: buyer enthusiasm jumps
6.0%–6.5%: buyers stay active (but selective)
6.5%–7.0%: steady, slower market
Above 7.0%: noticeable suppression in activity

If you want to time your move, price your home, or decide how aggressive to be as a buyer, this is one of the cleanest “macro” indicators to watch.

Want to Apply This to Your Specific Situation?

National data is helpful. But your outcome depends on your micro-market (neighborhood, price point, condition, competition).

Selling (or relisting) in the next 90 days?
Book a quick strategy call: https://calendly.com/stugalvis/20-minute-home-selling-strategy-consult-compli-clone
—or— text SELL to (720) 441-4815 and I’ll send you my simple plan for pricing + prep + launch (so you’re the shiny penny, not the average home getting ignored).

Buying and trying to win the shiny penny?
Book a quick strategy call: https://calendly.com/stugalvis/20-minute-home-buying-strategy-consult-complim-clone
—or— text BUY to (720) 441-4815 and I’ll send you my simple plan to win the right home without getting emotional, overpaying, or donating your future equity.