The importance for affordable housing solutions is reaching critical levels in some metros across the nation that have seen new construction, even increases in new construction, but at sales prices that most residents cannot afford. In cities like Denver, this is creating a gap between supply and demand that needs to be filled in.
Many builders are focusing on the right mix of entry level and move up offerings, but the pace may need to pick up.
Home builders across metro Denver continued to ramp up their efforts last year, starting more homes than at any time since 2007, according to a quarterly update from Metrostudy.
“2016 was another good year for home builders and the industry in Denver,” John Covert, the report’s author and director of Metrostudy’s Denver region, said in the report.
But as has been the case for last several years, construction focused primarily on higher-priced detached properties, something Covert predicts soon may change.
Builders started 11,038 homes in metro Denver last year, 22 percent more than they started in 2015, according to Metrostudy. The number of closings on new homes was up 18 percent last year versus 2015.
The price of a new detached home sold last year in metro Denver averaged $525,486, a 6 percent increase from the average new detached home price in 2015.
Assuming a 10 percent down payment on a 30-year mortgage at current interest rates, a household would need $105,315 in annual income to qualify, according to the website Mortgage Calculator.