The American dream of homeownership seems to be slipping further away for Denver residents. While many aspired to buy a house in the Mile High City, a recent Zillow report paints a harsh reality: Denverites now need to earn significantly more to comfortably afford a home.
Just a few years ago, in 2020, a comfortable annual income of $101,365 was enough to secure a home in Denver. However, that number has skyrocketed by a staggering 70.5%, making homeownership a distant dream for many. According to the report, Denverites now need to make a whopping $173,000 to afford a home.
This isn’t just a Denver issue. The report highlights a nationwide trend. The average American household income needs to surpass $106,000 to comfortably own a home, a significant increase of 80% since 2020. This means the dream of homeownership is becoming increasingly out of reach for the average American household.
So, what’s driving this affordability crisis? The finger points towards several factors:
- Soaring home prices: Denver’s home prices have more than doubled in the past decade, making them significantly less affordable.
- Rising mortgage rates: Mortgage payments have also seen a sharp increase, jumping 85.5% over the last four years, further squeezing potential homeowners.
- Wage stagnation: Unfortunately, wages haven’t kept pace with the rising costs. While the cost of owning a home in Denver has increased by 18% since 2022, wages have only grown by 6%, according to a report from the Common Sense Institute of Colorado. This widening gap between income and housing costs is making homeownership a struggle for many.
The situation seems particularly dire in Denver compared to the national average. While Denver residents need to make $173,000, the national average sits at $106,000. This means Denverites face a steeper climb towards achieving their dream of homeownership.
As for renters, Zillow says Denverites need to make at lease $79k a year to live comfortably.
