September 2023
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.