Report shows Colorado Springs is not the only city with soaring housing costs

Real Estate

Report shows Colorado Springs is not the only city with soaring housing costs

Colorado Springs has plenty of company when it comes to soaring housing costs.

Single-family home prices in the Springs rose by a robust 13.6% in the third quarter when compared with the same period last year, pushing the local median home price to $371,900, according to a National Association of Realtors report released Thursday.

But while Colorado Springs saw prices climb, so did other metro areas included in the association’s third- quarter report. What’s more, nearly two-thirds of the areas tracked by the association — 117 out of 181 — saw double-digit price gains.

A shortage of homes listed for sale and historically low mortgage rates that have fueled buyer demand have combined to push up prices, the association said.

On Thursday, 30-year, fixed-rate loans averaged 2.84% nationally — up from 2.78% last week, but still down by about a full percentage point from a year ago, according to mortgage buyer Freddie Mac.

But even as borrowing costs remain low, rising prices continue to take a toll on many buyers — especially first-timers — and make it difficult for them to afford a home, Lawrence Yun, the association’s chief economist, said in a news release.

The monthly mortgage payment on a typical existing single-family home that’s financed with a 30-year, fixed-rate loan and 20% down payment increased to $1,059 in the third quarter, the association said in its report. That’s up from $1,019 in the second quarter and $1,032 a year ago.

Households needed just over $50,800 in annual income to comfortably afford mortgage payments on a typical existing single-family home, up from $48,912 in the second quarter and $49,536 during the third quarter of last year, the association said.

“As home prices increase both too quickly and too significantly, first-time buyers will increasingly face difficulty in coming up with a down payment,” Yun said.

“Transforming raw land into developable lots and new supply are clearly needed to help tame the home price growth.”

Other takeaways from the association’s report:

  • Metro areas with the top five percentage gains in prices were Bridgeport, Conn., 27.3%; Crestview, Fla., 27.1%; Pittsfield, Mass., 26.9%; Kingston, N.Y., and Atlantic City, N.J., tied at 21.5%; and Boise, Idaho, and Wilmington, N.C., tied at 20.6%. Colorado Springs’ 13.6% gain was the 33rd highest.

  • The Springs’ $371,900 median price ranked as the 27th most expensive among the report’s 181 metro areas. Boulder’s median of $673,400 was the seventh priciest, while Denver was 13th highest with a median of $506,000. Topping the list were San Jose, Calif., $1.4 million; San Francisco, $1.125 million; Anaheim, Calif., $910,000; Honolulu, $866,200; and San Diego, $729,000.

  • Nationwide, the median existing single-family home price increased to $313,500, up 12% on a year-over-year basis and four times higher than the median family income, which grew at 2.9%. The country’s four major regions saw double-digit price gains — 13.7% in the West, 13.3% in the Northeast, 11.4% in the South and 11.1% in the Midwest.

  • At the end of the third quarter, 1.47 million existing homes were available for sale nationwide, 19.2% lower than a year earlier. In September, housing inventory totals equaled a 2.7-month supply, based at the current pace of sales.