Housing is slightly more affordable in Colorado, a report shows. You may not have noticed.

Colorado was called out for, of all things, being a bit more affordable, according to the National Housing Conference’s latest report on housing.

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It’s a very thin silver lining for workers and the housing industry that have been through an economic whirlwind since the pandemic. But in a state where affordability has worsened annually since the NHC began tracking various jobs in the pandemic, the change was notable. 

“It’s still a bit of a balance because Colorado is still unaffordable, to be clear,” said Brittany Webb, NHC’s senior research director, who worked on the report titled, “.” “It’s not back to the levels of affordability that it saw back in around 2020, and that’s true of every single state in the U.S. But what did stand out (was) home ownership showed an improvement for the first time in several years.”

NHC, a Washington, D.C.-based nonprofit that focuses on housing affordability, takes a different slice of federal data to define affordability. It tracks 300 occupations in 390 metro areas to determine whether an average worker can afford to pay 28% to 30% of their annual income to buy or rent in their community. 

The answer, according to NHC’s analysis, is a resounding “no” nationwide. But it’s been especially so among states where affordability has gotten worse each year since 2020. Colorado was in that group, but last year saw affordability improve by 1.98 percentage points for homeownership and 1.56 point gain for renters last year. Florida topped the list for homeowner affordability improvement, up 2.36 points. South Dakota had an 8.47 point gain in renter affordability, the highest in that category in one year.

Nineteen occupations —  including dentists in Colorado Springs, sales managers in Greeley, detectives in Pueblo and computer and information systems managers in Grand Junction — that couldn’t afford a home in 2024, saw enough wage gains last year to be able to put 10% down to buy a house. 

Those jobs are part of the 4% of Colorado occupations that can afford a house in their town, down from 13% in 2020, according to NHC’s analysis. Meanwhile, only 41% of the occupations in Colorado are paid enough for a worker to rent a two-bedroom apartment without paying more than 30% of their income or getting a roommate. In 2020, it was 50%. 

Nationwide, only 14% of occupations tracked can afford a home, while 52% can afford to rent.

“In theory, everyone” should be able to afford housing, Webb said. “That’s the idea. We’re always going to have a percentage of folks that are just on the lowest end of the earnings spectrum and probably not going to be able to afford housing without some sort of government assistance. … But we certainly don’t want to see things getting worse and worse. Fifty percent of renters is absolutely not acceptable.”

Another check on housing affordability: Home prices

While the NHC analysis is one way to look at the data, another is the real estate industry’s September home sales report, which came out Tuesday and documents the continued slowdown of the Colorado housing market.  

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Overall median sales prices statewide dropped to $540,000 last month, down 1.6% from a year ago. The number of homes and condos sold fell 12.3%, according to the Colorado Realtor Association. The Denver metro area had similar declines, with median prices down 1.7% to $575,000, while the overall number sold fell 18.7%. 

Declining prices have made housing more affordable. CAR’s affordability index, which is based on median sales prices and median income by county, shows that September affordability is nearly back to where it was before the Federal Reserve began increasing interest rates in March 2021.

But this is not your typical buyer’s market, Denver Realtor Cooper Thayer said.

There are fewer homes for sale and even fewer are actually selling. Buyers are “exhibiting increasingly little urgency to act,” Thayer said in an email.

Condos and townhouses have helped push prices down with overall median prices down 7.1% from a year ago in Colorado, and down 6.2% in the Denver metro. But high homeowner association fees and insurance costs have made such attached homes less popular, and renters have opted for lower rents due to an oversupply of new apartments in the Denver metro. 

There are first-time buyers out there, but many buyers come with some sort of financial advantage, either an existing home to sell or they have the cash to cover higher interest rates and the higher costs of owning a house.

“That’s not what you’d ordinarily expect from a traditional buyer’s market, where an overwhelming supply of homes gives purchasers the upper hand,” Thayer said. “Instead, we’re experiencing a market where demand has weakened even faster than supply. And the buyers who remain are exercising that leverage.”

Nearly half of the homes sold in September in the Denver metro asked for a price reduction, while 64% had seller concessions, he said. 

“I think there’s an important distinction between a housing market becoming more affordable and a housing market becoming more favorable for buyers,” Thayer said. “Those are two very different things.”

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