DENVER (KDVR) — Colorado is one of the worst states in the nation for homebuyers looking for a starter home, according to a recent study.
A study by Construction Coverage used data from Zillow, Redfin, Freddie Mac, and the U.S. Census Bureau to find the best places to buy a starter home across the United States.
Researchers ranked Colorado as the second-worst state for buyers looking for a starter home. Also, out of 55 metropolitan areas in the United States, the Denver-Aurora-Lakewood metropolitan area ranked his fifth worst for buying a starter home.
The study found that several other cities in Colorado were among the worst places to buy a starter home.
Colorado has a shortage of affordable, starter-sized housing.
The study defines starter-sized homes as homes with three or fewer bedrooms. In Colorado, 59.2% of homes are starter-sized, with a median sales price of $479,162. According to the survey, the national average for starter-sized homes is 67.7%.
Utah, Maryland, North Dakota, South Dakota and Georgia are the only states with fewer starter-sized homes, according to the study. He also noted that construction of starter-sized homes is on the decline, particularly in the northern Great Plains and Mountain West regions.
Colorado's few starter home buying options are more expensive than many other states.
The estimated monthly mortgage payment for a typical starter home in Centennial requires 50% of the renter's median income. The same statistics show that more than half of the states had rates below 40%, and the national average was 39.8%.
West Virginia was ranked as the best state to buy a starter home. By comparison, 76.5% of West Virginia homes are starter-sized, with a median sales price of $148,102.
The median sales price for a starter-sized home was less than $200,000 in seven states and less than $300,000 in 26 states.
Colorado ranked among the 50 states for:
- Starter-size mortgage payments are the 11th highest percentage of renters' income.
- 6th least starter-sized homes
- Median price for starter-sized homes is 5th highest
The only state with a worse overall ranking for starter homes was California.
Worst states to buy a starter home:
- California
- colorado
- Washington
- Massachusetts
- Utah
Best states to buy a starter home:
- west virginia
- oklahoma
- mississippi
- louisiana
- arkansas
The Denver metropolitan area is comparable to California cities.
Of the 55 metro areas analyzed in the study, the Denver-Aurora-Lakewood metro ranks as the fifth-worst for first-time homebuyers.
According to the study, the median sales price for a starter home in the Denver metro area is $507,268. Mortgage payments as a percentage of renter income in Denver is slightly lower than Colorado's overall rate of 48.1%.
The single worst metro areas are Seattle, Tacoma, Bellevue and three other places in California. Denver ranked worse than other well-known metropolitan areas such as Los Angeles-Long Beach-Anaheim, Boston-Cambridge-Newton, and New York-Newark-Jersey City.
Best metropolitan areas for starter homes:
- Pittsburgh, Pennsylvania
- Tulsa, Oklahoma
- Oklahoma City, Oklahoma
- Detroit-Warren-Dearborn, Michigan
- New Orleans, Louisiana – Metairie
Worst metropolitan areas for starter homes:
- San Jose – Sunnyvale – Santa Clara, California
- San Diego – Chula Vista – Carlsbad, California
- Seattle – Tacoma – Bellevue (Washington)
- San Francisco-Oakland-Berkeley, California
- Denver – Aurora – Lakewood, Colorado
The median sales price for a starter home in 23 metropolitan areas was less than $300,000. Denver was among just nine of the 55 metropolitan areas where the median sales price for a starter home exceeds $500,000.
In Pittsburgh, the premier metropolitan area, the median sales price for a starter-sized home is $184,026.
Some areas of Colorado are among the worst in the nation for starter homes.
The study analyzed data from 330 large, medium, and small metropolitan areas in the country. Denver is just one of several areas in Colorado that ranks among the worst metropolitan areas in the nation for first-time homebuyers, according to the data.
Here's how the Colorado regions included in this study rank for first-time homebuyers.
- Boulder: 327
- Denver-Aurora-Lakewood: 325
- Fort Collins: 318
- Greeley: 303
- Grand Junction: 213
- Pueblo: 201
Boulder was among 12 of the 330 areas surveyed where the homeownership rate for people under 35 was less than 20%.
metropolitan area | Percentage of starter-sized homes | Starter-size mortgage payments as a percentage of renter's income | Median sales price for starter-sized homes |
pueblo | 65.3% | 46% | $270,435 |
grand junction | 70.4% | 48.2% | $362,954 |
Greeley | 56.9% | 54.3% | $441,547 |
fort collins | 59% | 56.4% | $490,748 |
Denver-Aurora-Lakewood | 57.1% | 48.1% | $507,268 |
boulder | 57.5% | 67.4% | $638,945 |
Meanwhile, 80 of the 330 metro areas analyzed in the study had a median sales price of $200,000 or less for a starter-sized home.