(SPONSORED) — Home prices are starting to get better in the U.S, however that doesn’t mean we will see declines everywhere, including in Colorado. Director of the UCCS Economic Forum, Tatiana Bailey discussed the Housing Opportunity Index, and how it helps to determine what Coloradans can actually afford.
Bailey said, “The Housing Opportunity Index shows the proportion of homes sold that are affordable to a typical household that earns the median income.”
According to Bailey, the index shows that previously 70% of homes sold were affordable for the median income, now however, only 22% of homes sold are affordable.
“Less than a quarter of the available homes for sale, new or existing, are in a price range that a typical earning household can afford. I don’t think the word tragic is too strong,” said Bailey.
A low affordability percentage is good for the rental market, as there is strong demand for apartments, condos, townhomes, and even single-family homes. “Young people in particular who are now priced out of the housing market to buy have no choice but to rent,” said Bailey. “As an economist and a mom, I don’t like that because the primary mechanism for people building wealth is buying a home.”
Bailey said there is hope, as Free markets adjust, even if it takes time. This as, there is pressure to add more residential space to cities in a variety of ways, including building more tiny homes and the idea of standardizing how we build homes, including more modular pieces.
“All of these things have to be done for the cities that will succeed in the affordable housing crisis that we have across the United States and in the cities that will be able to attract and retain young talent,” said Bailey.