Boomers and Gen Z most likely to be priced out in state’s most populated counties, study finds
As seen on The Denver Post
Between higher property prices and higher interest rates, housing affordability continues to deteriorate in Colorado this year, leaving Gen Xers as the one age group still able to afford a mid-priced home in Arapahoe and El Paso counties — but not Denver.
Denver moved from the country’s eighth least affordable metropolitan housing market in February to the fifth least affordable, behind Miami, in March, according to a monthly survey from OJO Labs, a real estate tech company based in Austin. Metro Denver’s median sold price has risen more than 23% in the past year to $564,990 and is now 6.6 times the median household income, the survey found.
Colorado Springs ranked as the ninth least affordable metro area for the second month in a row, with a median home sold price of $435,000, six times the median household income, according to OJO Labs. The comparable unaffordability score nationally was 4.7 in March, up from 4.4 in February.
Point2Homes, in a separate study last month, looked at generational affordability in the 100 largest U.S. counties, comparing median household incomes against median home prices, as well as the wealth available to fund a down payment. Denver, Arapahoe and El Paso counties, home to about 36% of the state’s population, were included.
“Housing costs are taking up progressively more of a household’s income, making the issue of home affordability a multi-faceted problem, one that needs local, personalized solutions,” said Carmen Rogobete, a communications strategist at the International real estate portal, which is part of Yardi Matrix.
Point2Homes divided generations differently than the U.S. Census Bureau and most demographers. Gen Z was defined as age 15 to 24, millennials from age 25 to 44, Gen X from age 45 to 64, and baby boomers, 65 and up.
Of those four generations, only Gen X had median incomes high enough to purchase median-priced homes in Arapahoe and El Paso counties. A Denver buyer at the median income faced an affordability cap of $559,920 versus the study’s median home price of $616,875. Nationally, about 70 of the 100 counties studied were affordable to Gen X buyers looking to purchase a home at the median or mid-point.
Millennials, by contrast, made enough to afford homes in only 34 of the 100 counties studied and none of the Colorado counties, although they came close in Arapahoe County. They are considered the prime buying group active in the housing market, at least for starter homes.
“Local markets vary greatly. But it’s probably safe to say that many buyers, not just millennials, are choosing the suburbs or other more affordable areas if they want to become homeowners,” Rogobete said.
The study used an age range that pushed Baby Boomers into retirement when incomes tend to be lower. They had the biggest affordability hurdles to overcome after Gen Z. Only 11 counties nationally were affordable to Baby Boomers — none in Colorado. The study, however, didn’t account for the home equity many retirees have built up, a store of value that can be used to purchase a smaller home outright.
Nationally, none of the 100 large counties was affordable to Gen Z buyers at the median income. That’s not a surprise, given they are starting out in their careers and making less money. Typically, they make enough to afford a $284,279 home in Arapahoe County, a $282,890 home in Denver County and a $238,344 home in El Paso County. All of those are hard to come by in the current market.
