Locals need to make more money to buy a home
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Denver locals need to earn 38.7% more than a year ago to afford the region's median-value home, per the latest analysis by real estate company Redfin.
The big picture: The income necessary to pay for a home in metro Denver has soared as limited inventory and strong demand have driven up sale prices, and surging mortgage rates have made home loans more expensive.
Why it matters: Wages and salaries are not growing at that pace, further constricting entry into the housing market.
By the numbers: In March 2021, hopeful homebuyers had to earn at least $80,161 to afford the median home for sale in the metro area, Redfin found.
- This March, you needed to make no less than $111,213.
- For a median sales price home of $600,625, a monthly mortgage, with 5% down, jumped from $2,004 to $2,780, per Redfin.
- Of note: A monthly mortgage payment is considered affordable if the homebuyer spends no more than 30% of their income on housing.
Meanwhile, wages grew 5% nationwide over the same period, according to the Bureau of Labor and Statistics.
- Median household income in the Denver metro is $83,289, newly released census data for 2016-2020 shows.
Zoom out: Across the U.S., buyers need 34% more income to afford a home, Redfin found.
What they're saying: "Housing is significantly less affordable than it was a year ago because the surge in housing costs has far outpaced the increase in wages, meaning many Americans are now priced out of homeownership," Redfin deputy chief economist Taylor Marr said.