Feb. 10—Colorado Springs home prices increased in late 2022 at one of the slowest rates in the nation — a dramatic turnaround from recent years when the city regularly was near the top of the pack for price appreciation and another sign of the impact of last year's spike in mortgage rates.

The median price of homes that sold during the fourth quarter of 2022 in the Springs rose to $443,400, a miniscule 0.2% increase over the same period in 2021, according to a report released this week by the National Association of Realtors.

That ranked Colorado Springs as No. 98 for price gains out of nearly 190 metro areas in the association's report. But because of ties, there were actually 164 markets with price increases higher than the Springs in the fourth quarter.

Only two metro areas had gains that were lower than Colorado Springs, while 20 saw year-over-year price declines in the fourth quarter.

By comparison, prices in the Springs rose by 19.2% on a year-over-year basis in the fourth quarter of 2021 compared with the same period in 2020, the association's data show. That increase was the 28th biggest at the time.

The Realtors Association's report includes data for single-family detached homes and townhomes.

Industry experts have said that last year's surge in mortgage rates chilled the local housing market, as it did in many areas of the country.

Thirty-year, fixed-rate mortgages — which are the most popular for homebuyers — roughly doubled to more than 6% by the end of 2022, according to mortgage buyer Freddie Mac. That increase followed the Federal Reserve's hike in interest rates in an effort to cool inflation.

When mortgage rates rose, many buyers found themselves priced out of the market. With a slowdown in demand, many sellers cut their asking prices.

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"We've never seen it this flat like this before," Harry Salzman, a veteran real estate agent with ERA Shields Real Estate and Salzman Real Estate Services, said of prices. "Even when we had 18% to 20% mortgages, we still saw appreciation in the early '90s of about an average of about 12%.

"Flat, zero appreciation is something new and different for this market," he added.

Even so, Salzman remained bullish on the Springs' housing market and predicted prices will increase 3% to 5% in 2023.

The National Association of Realtors has forecast a decline in long-term mortgage rates to under 6% by the third and fourth quarters of this year, which will help boost demand, he said.

At the same time, new construction in areas such as the red-hot InterQuest area on the north side and a handful of recent job announcements — including one in which a Denver company said it plans to add more than 300 employees in the Springs at an average pay of just over $165,000 — are signs the local economy remains strong, he said.

"Those kind of people are going to want to be (home) owners versus being tenants, so that's going to increase demand, with lower amounts of supply," Salzman said, explaining why he sees price increases ahead.

Of other Colorado metro areas in the Realtors Association's report, Fort Collins had the largest percentage increase of 5.3% on a year-over-year basis, which pushed its median price to $585,300.

Denver-Aurora-Lakewood's median rose 3.6% to $640,000. Boulder, which is regularly one of the most expensive markets in the association's report, had a 2% year-over-year drop to $759,500.

The top 10 metro areas with the largest year-over-year, percentage increases in prices were Farmington, N.M., 20.3%; North Port-Sarasota-Bradenton, Fla., 19.5%; Naples-Immokalee-Marco Island, Fla., 17.2%; Greensboro-High Point, N.C., 17%; Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C., 16.2%; Oshkosh-Neenah, Wis., 16%; Winston-Salem, N.C., 15.7%; El Paso, Texas, and Punta Gorda, Fla., 15.2%; and Deltona-Daytona Beach-Ormond Beach, Fla., 14.5%.

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