housing market 2022: is it cheaper to buy or rent in denver?
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By Ashley Fahey & Ethan Nelson | Published on January 18, 2022
While it's still more affordable to buy a home than it is to rent in most places across the U.S., that's not the case in many counties across Colorado.
In 22 of the state's counties with 500 or more recent sales, it is only cheaper in four to buy a home then rent a three-bedroom, according to a recent study.
Summit County and Eagle County, both on the Western Slope, rank as the two least-affordable counties in the country for buying a home. Average sales prices in these mountain counties top $1 million and only continue to grow. They're also the only two areas in the state where house payments are greater than monthly wages. That puts them on par with counties in the Bay Area, southern California and Brooklyn.
Attom Data Solutions LLC, a property-data provider based in Irvine, California, recently analyzed where it's more affordable to either own a median-priced home or to pay the average rent on a three-bedroom rental unit across 1,154 counties in its 2022 Rental Affordability Report.
The analysis found that, despite home prices growing faster than rents in 90% of the U.S., it's typically more affordable to own a home in 666, or 58%, of counties analyzed.
In Colorado, that's true in just Pueblo, Morgan, Fremont and Park Counties. For Denver County, renting takes a little more than a third of average monthly pay, while buying a home consumes nearly half. The average 2022 monthly rent for a three-bedroom unit in Denver, according to Attom, is $2,416, a slight increase from 2021.
The state's most affordable county for renting is Broomfield – the $2,400 a month it takes to rent a three-bedroom unit takes about 28% of the county's average monthly wages, according to Attom. That's in part due to Broomfield County's relatively high 2021 monthly pay of $7,948, which is 10th in the nation among counties analyzed by Attom. That figure grew the 15th most in the country from 2020.
In every Coloradan county, though, home prices are rising faster than wages. In the Denver metro, home prices averaged $612,274 in 2021, an increase of 16.68% from 2020 and a new high for the area, according to the Denver Metro Association of Realtors' January market trends report released earlier this month.
And the disaster that struck the metro area earlier this year has only exacerbated the housing shortage. More than 1,000 homes were destroyed in the Marshall and Middle Fork fires in Boulder County on Dec. 30, and an additional 149 residential buildings were damaged by the fire, according to figures most recently released by Boulder County. The homes affected by the fires were worth hundreds of millions of dollars.
Across the country, the gap between affording buying a home versus renting is narrowing.
But much depends on the geography of a metropolitan area and, drilling down further, urban versus suburban versus rural counties. Attom found, among less-populous suburban and rural areas, homeownership tends to outweigh renting more visibly, whereas renting generally remains more affordable in the biggest, and more urban, metropolitan areas across the U.S.
Geographically, the South and Midwest contain the most affordable for-sale and rental housing markets. Attom considered average wages relative to local home prices in determining affordability for its analysis.
It found the least-affordable counties for homeownership across the U.S. are Summit County, Colorado; Eagle County, Colorado; Marin County, California; Santa Cruz County, California; and Summit County, Utah.
The most affordable for owning, among counties with a population of at least 1 million, are Wayne County, Michigan; Allegheny County, Pennsylvania; Cuyahoga County, Ohio; Philadelphia County, Pennsylvania; and Harris County, Texas.
The most affordable rental markets with populations of 1 million or more are similar: Allegheny County, Pennsylvania; Cuyahoga County, Ohio; Fulton County, Georgia; Oakland County, Michigan; and Franklin County, Ohio.
The least-affordable rental markets across the nation are Santa Cruz County, California; Kauai County, Hawaii; Honolulu County, Hawaii; Santa Barbara County, California; and Monterey County, California.