Newsmakers Feb. 7-20: NoCo home affordability takes a dive

An index compiled by the Colorado Association of Realtors in February showed that homes are becoming less affordable for the region’s middle class.

The index was based on data from Realtor associations in Estes Park, Fort Collins, Boulder, Greeley, Loveland/Berthoud and Longmont. Information was also compiled from Logan and Morgan counties.

In the fourth quarter of 2013, the index was 142 for northeastern Colorado, down from 154 nearly two years earlier. Housing affordability index levels above 100 indicate that median family income is above what is needed to afford the median-priced home assuming current interest rates. The higher the index, the more affordable are the median-priced homes.

The index is designed to measure how much a family earning the median income can afford assuming it doesn’t want its mortgage payment to exceed 28 percent of pre-tax income and that a 20-percent down payment will be made.

At the time, the median single-family home price in Fort Collins, for example, was $261,000. The median household income in 2012, meanwhile, was $53,359. Twenty-eight percent of that income is $14,941, or $1,245 per month. At 4.5 percent interest, meanwhile, the mortgage payment on that $261,000 home, with a 20-percent down payment, would be $1,058, making it still affordable by the realtors’ index standards but less so than two years ago.

UPDATE

Since that time, home prices in the Boulder Valley and Northern Colorado have only risen. The median price in Fort Collins in October was $283,800, up nearly 11 percent from the same month a year earlier. In Boulder, the median single-family home price was $655,000, up 6.5 percent. Greeley’s median for October was up a whopping 23 percent from a year earlier, from $165,000 to $203,000. In Longmont, the median was up 2.1 percent to $268,000. And in Loveland/Berthoud, it was up 2.8 percent to $267,250.

By comparison, median household income in Colorado rose by just 2.4 percent in 2013, according to Census Bureau figures. Average mortgage rates for 30-year fixed-rate loans have dropped about half of a percentage point since the early part of this year, according to bankrate.com.

Reporter Joshua Lindenstein contributed to this report.

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