More than half of homebuying Denverite households have six-figure incomes, according to a new Zillow study. The median income for renter households in Denver is half of buyer households' median income.
In 2017, 52 percent of metro Denver homebuyers made $100,000 or more in household income, up 10 percent from 2012. Denver's share put it in ninth place in the study of 36 metros, and it was the highest for a metro not located on a U.S. coast. Zillow senior economist Aaron Terrazas says, "You can’t escape the rising costs of home values that are rapidly outpacing incomes. It pushes homeownership further and further out of reach." The Denver Post reports that the metro median income for buyers was $100,288, whereas renters' median income was $49,800, even though renter incomes rose faster than buyer incomes in that time.
Boulder mortgage banker Lou Barnes told real estate agents with 8Z last week that home prices go through spurts of strong appreciation followed by flat periods where incomes get time to catch up. Although Denver’s home-price gains were stronger than typical, he expects that pattern to repeat as the market takes a breather.
But Terrazas countered that the price appreciation seen in metro Denver was so extreme, in large part because of a lack of new entry-level home construction, that it will be difficult to reclaim historical norms of affordability. “Incomes have a long way to go to catch up,” he said.