Northern Front Range is an Epicenter of Rising Home Unaffordability

(DENVER POST) - Nowhere else in the country has home affordability gotten so out of whack than along the northern Front Range, according to a housing report released Thursday.

Of the 12 counties in the U.S. where relative home affordability is at its lowest level, seven are in northern Colorado, according to an affordability index that ATTOM Data Solutions compiles every quarter. The counties topping the list of unaffordable homes: Adams, Arapahoe, Denver and Weld.

Of the 379 counties examined, Jefferson County ranked seventh, Larimer County 10th and Boulder County 12th.

“Denver is experiencing the growing pains of transitioning from a typical Midwestern, meat-and-potatoes housing market to a West Coast-style trophy market attracting buyers across the country and the world,” said Daren Blomquist, a senior vice president at ATTOM.

Every quarter, ATTOM looks at the median prices of homes sold in hundreds of counties and compares that to average annual wages to determine how much income a mortgage and related payments would consume, given current interest rates.

It then compares the current housing burden to the historical burden through an affordability index. Nationally, the home affordability index is at 103, near the historical average of 100. A typical buyer needs to devote about a third of their average income toward a home payment, given current prices and interest rates.

But in about a quarter of the counties surveyed, home payments are now a heavier burden on incomes than is usually the case. In those counties, buyers must allocate 43 percent of their incomes to housing, at the upper limit of what banks are willing to lend (assuming no large debts such as student loans or auto loans are in the mix).

And then there is the northern Front Range, where housing affordability is diverging from the norm in a way not seen since the housing boom a decade ago.

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