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Home Affordability in Colorado: Update to Colorado’s Homebuyer Misery Index

Introduction

While overall prices remain elevated due to high levels of inflation over the past 18 months, the rate of growth moderated in July. The continuing deterioration in affordability will plague homebuyers, while at the same time higher interest rates may deter new homebuilding which will restrict supply putting further upward pressure on home prices. CSI developed the ‘Misery Index’ in 2022 to help depict the challenge homebuyers face in the current market. The index sums normalized and equally weighted home prices and 30-year mortgage rates to measure effective costs of homebuying relative to historical levels. Key Findings
  • Colorado ranks #2 in the nation for the largest decreases in housing affordability since 2009 according to the Colorado Homebuyer Misery Index.
  • Mortgage interest rates hit 7% in August for the first time in 20 years. This sent the index soaring, further decreasing housing affordability, after it had moderated for several months.
  • Other states among the top ten largest decreases in affordability are Montana, Idaho, Tennessee, California, Utah, Florida, South Dakota, Arizona, and Texas.
  • Among Colorado cities, Steamboat had the largest decrease in home affordability since January 2009. Also making the top five, Edwards, Fort Morgan, Canon City, and Pueblo.
  • Boulder had the smallest decrease in home affordability.
Home Affordability in Colorado July 2023 Based on the Homebuyer Misery Index Home affordability in Colorado has decreased 90.8% since January 2009, the second largest decrease in affordability out of 50 States and the District of Columbia, see Figure 1. Louisiana had the smallest decrease in home affordability.
Colorado Home Affordability
Top Ten Largest Decreases in Affordability
State January 2009 July 2023 % Change Rank
Montana 100 193.72 93.7% 1
Colorado 100 190.84 90.8% 2
Idaho 100 190.47 90.5% 3
Tennessee 100 187.68 87.7% 4
California 100 182.92 82.9% 5
Utah 100 182.11 82.1% 6
Florida 100 181.17 81.2% 7
South Dakota 100 181.09 81.1% 8
Arizona 100 180.52 80.5% 9
Texas 100 180.22 80.2% 10
Bottom Ten Largest Decreases in Affordability
State January 2009 July 2023 % Change Rank
Wyoming 100 155.37 55.4% 41
Virginia 100 152.15 52.2% 42
Pennsylvania 100 151.97 52.0% 43
New Mexico 100 150.95 50.9% 44
Delaware 100 147.22 47.2% 45
New Jersey 100 146.92 46.9% 46
Alaska 100 143.33 43.3% 47
Illinois 100 143.26 43.3% 48
Maryland 100 140.90 40.9% 49
Louisiana 100 139.37 39.4% 50

Figure 1- Homebuyer Misery Index  

Figure 2 shows the Home buyer Misery Index for Colorado versus the U.S. from January 2009, the first year Zillow has data on average home prices, through July 2023.

Figure 2 – Homebuyer Misery Index Colorado and U.S. Within Colorado MSA’s that Zillow tracks, Steamboat had the largest decrease in home affordability, 93.7% since January 2009. Boulder had the smallest decrease in affordability.
Colorado Home Affordability by MSA
Top Ten Largest Decreases in Affordability
MSA January 2009 July 2023 % Change Rank
Steamboat Springs 100 193.72 93.7% 1
Edwards 100 190.84 90.8% 2
Fort Morgan 100 190.47 90.5% 3
Canon City 100 187.68 87.7% 4
Pueblo 100 182.92 82.9% 5
Glenwood Springs 100 182.11 82.1% 6
Sterling 100 181.17 81.2% 7
Breckenridge 100 181.09 81.1% 8
Montrose 100 180.52 80.5% 9
Colorado Springs 100 180.22 80.2% 10
Greeley 100 155.37 55.4% 41
Grand Junction 100 152.15 52.2% 42
Craig 100 151.97 52.0% 43
Durango 100 150.95 50.9% 44
Fort Collins 100 147.22 47.2% 45
Denver 100 146.92 46.9% 46
Boulder 100 143.33 43.3% 47
Figure 3 – Homebuyer Misery Index Colorado and U.S.  
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