Home Values at a Summer High- July 2022 Northern Colorado Market Report

This year alone, we've seen inventory increase month-over-month by 33% as well as year-over-year by 50.2% respectively, putting Northern Colorado at 1.5 months of supply for the first time in almost 2 years.

Pending sales saw a huge decrease across the board for all home types at 28.8% for single-family homes and 27.4% for multifamily homes. When looking at the number of homes that closed, only 273 single-family homes sold in June and a mere 100 for multifamily- which was a 23.7% decrease for detached homes and 14.5% for attached.

When single-family home prices skyrocketed to almost $718k this month, a 25.4% increase compared to June of 2021, it makes you wonder who can afford these prices?

When you hear the term home affordability, does the average consumer truly understand what this means and entails? Although home prices in Northern Colorado have statistically lagged behind the Denver Metro Area in the last couple of years, it's becoming less and less affordable for the average consumer to purchase a home.

What is the Housing Affordability Index?

The National Association of Realtors affordability index measures whether or not a family can qualify for a mortgage loan on a typical home based on household income. The index for a family can range from zero to over 100. If a family receives an index rating of 100, that means that the family has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that the family has more than enough income to qualify for a mortgage loan, assuming a 20% downpayment.

What does the index mean for Coloradans?

While home ownership is the dream for countless Coloradans, we have to wonder if the uptick in interest rates, coupled with the significant increase in current home values, will make many decide to get out of the home acquisition rat race and decide to continue renting.

Currently, for the Northern Colorado region, the Housing Affordability Index (HAI) has dropped for single-family homes, a 38.1% decrease from June 2021. Attached listings experienced a similar decline of 33%. The data shows that home ownership in Northern Colorado has started to become a less affordable area for so many buyers. Hopefully, the recent increase in inventory and promise of long-term appreciation and value will encourage buyers to stay in the game.