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Colorado ranked amongst worst states to discover a starter residence

DENVER (KDVR) — Colorado is one of the worst states in the nation for homebuyers looking for a starter home, according to a recent study.

The 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 country.

The researchers ranked Colorado as the second-worst state for buyers looking for a starter home. And out of 55 large U.S. metro areas, the Denver-Aurora-Lakewood metro area ranked the fifth-worst for buying a starter home.

The study found several other Colorado cities are among the worst places for buying a starter home.

Colorado short on affordable starter-sized homes

The study defines a starter-sized home as one with three or fewer bedrooms. In Colorado, 59.2% of homes are starter-sized, with a median sale price of $479,162. The national average for starter-sized homes is 67.7%, according to the study.

The only states with fewer starter-sized homes are Utah, Maryland, North Dakota, South Dakota, and Georgia, according to the study. It also noted a declining trend in the construction of starter-size homes, especially in the northern areas of the Great Plains and Mountain West.

Colorado’s few starter homebuying options are more expensive than many other states.

The estimated monthly mortgage payment for a typical starter home in the Centennial State demands 50% of the median renter income. The same statistic was under 40% in over half of the states, with a national average of 39.8%.

West Virginia was ranked as the best state for buying a starter home. For comparison, 76.5% of homes in West Virginia are starter-sized, and the median sale price there is $148,102.

The median sale price for starter-sized homes was under $200,000 in seven states and under $300,000 in 26 states.

Colorado was ranked among the 50 states with:

  • 11th highest starter-size mortgage payment as a share of renter income
  • 6th fewest starter-sized homes
  • 5th most expensive median price for starter-sized homes

The only state with a worse overall ranking for starter homes was California.

Worst states for buying a starter home:

  1. California
  2. Colorado
  3. Washington
  4. Massachusetts
  5. Utah

Best states for buying a starter home:

  1. West Virginia
  2. Oklahoma
  3. Mississippi
  4. Louisiana
  5. Arkansas

Denver metro area comparable to California cities

Of the 55 large metro areas the study analyzed, the Denver-Aurora-Lakewood metro is ranked the fifth-worst for first-time home buyers.

According to the study, the median sale price of starter homes in the Denver metro area is $507,268. The mortgage payment as a share of renter income in Denver is slightly lower than the overall for Colorado at 48.1%

The only worse large metro areas are Seattle-Tacoma-Bellevue and three others in California. Denver was ranked worse than notable metro areas like Los Angeles-Long Beach-Anaheim, Boston-Cambridge-Newton and New York-Newark-Jersey City.

Best large metro areas for starter homes:

  1. Pittsburgh, Pennsylvania
  2. Tulsa, Oklahoma
  3. Oklahoma City, Oklahoma
  4. Detroit-Warren-Dearborn, Michigan
  5. New Orleans-Metairie, Louisiana

Worst large metro areas for starter homes:

  1. San Jose-Sunnyvale-Santa Clara, California
  2. San Diego-Chula Vista-Carlsbad, California
  3. Seattle-Tacoma-Bellevue, Washington
  4. San Francisco-Oakland-Berkeley, California
  5. Denver-Aurora-Lakewood, Colorado

The median sale price of starter homes was under $300,000 in 23 large metro areas. Denver was among only nine out of 55 large metro areas where the median sale price of starter homes was over $500,000.

In the best large metro area, Pittsburgh, the median sale price of starter-sized homes is $184,026.

Several Colorado areas among worst in nation for starter homes

The study broke down data for 330 large, mid-size and small metro areas in the country. According to the data, Denver is just one of several Colorado areas among the worst metro areas in the nation for first-time home buyers.

Here is how the Colorado areas included in the study ranked for first-time home buyers:

  • Boulder: 327
  • Denver-Aurora-Lakewood: 325
  • Fort Collins: 318
  • Greeley: 303
  • Grand Junction: 213
  • Pueblo: 201

Boulder was among 12 out of 330 areas included in the study where the homeownership rate for those under 35 was under 20%.

Metro area Percentage of homes that are starter-size Starter-size mortgage payment as a share of renter income Median sale price of starter-size 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
Data from Construction Coverage study of best cities to find a starter home

Meanwhile, 80 of the 330 metro areas analyzed in this study had a median sale price of starter-size homes at $200,000 or less.

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