Colorado continues to grapple with a widening affordability gap despite steady homebuilding activity, according to Realtor.com®’s new State-by-State Housing Report Card. The state earned a C, reflecting a market where population and job growth have surged faster than construction and affordability improvements.
The report, part of the Let America Build campaign, evaluates how well states balance homebuilding with price accessibility — critical for the long-term health of their housing markets.
Colorado posted a score of 51.1, placing it in the national middle tier. Median home prices remain high at $599,104, while the median household income sits at $90,555, creating an affordability imbalance. With a Realtor Affordability Score of 0.55, typical buyers are finding only a fraction of homes within reach.
Builders continue to pull permits at a pace roughly aligned with population share — accounting for 2.2% of national permits vs. 1.8% of U.S. population — but industry experts say that isn’t enough to reverse years of underbuilding. A relatively small 5.3% premium between new and existing home prices shows newly built homes could help affordability if more supply comes online.
The challenge mirrors national trends. President Donald Trump has publicly urged major homebuilders to ramp up output, accusing them of artificially limiting supply to keep prices high.
“They’re sitting on 2 Million empty lots, A RECORD,” Trump wrote in an October Truth Social post, calling on Fannie Mae and Freddie Mac to help “restore the American Dream.”
“They’re my friends … but now, they can get Financing, and they have to start building Homes.”
The West — including Colorado — continues to face tough headwinds: high land costs, lengthy permitting, and zoning limits on housing density. Realtor.com data shows the region posted the sharpest drop in the share of new-construction listings compared to last year.
Nationwide, however, new homes are helping moderate costs. Prices for newly built homes held near $450,797, while resale prices ticked up slightly — narrowing the national new premium to 7.8%, the lowest in the current dataset.
As national stakeholders push for faster building, advocates stress the urgency.
“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies," says Shannon McGahn, NAR’s Executive Vice President and Chief Advocacy Officer.
She added that boosting supply supports jobs, small businesses, and generational wealth-building opportunities.
Colorado Governor Jared Polis has made housing one of his top policy priorities, arguing that state government must help lower construction hurdles.
“This report illustrates the importance of the urgent need to create more housing that Coloradans can afford,” Governor Polis told Realtor.com.
“We’re fighting hard to remove bureaucratic barriers and restrictions that stand in the way of new housing and to increase the supply of housing for every Colorado budget.”
Polis’ 2025 executive actions direct state agencies to prioritize infrastructure and housing grants for cities advancing transit-oriented and mixed-use development. The strategy is designed to shorten permitting timelines and boost construction near job and transportation centers.
“We are building more housing now and breaking down government barriers to new homes,” Polis said. “This action will lead to more housing that people can afford.”
His administration also recently backed changes legalizing accessory dwelling units (ADUs) statewide and lowering parking requirements, aiming to reduce costs and promote density where infrastructure already exists.
Industry analysts warn that construction costs — already elevated by labor shortages and material pricing volatility — could worsen if supply chain constraints reappear or borrowing costs rise again. Colorado’s growth trajectory remains strong, meaning the pressure to build faster is unlikely to ease soon.
Housing advocates argue the state must sustain momentum around permitting reform and push for broader zoning flexibility to prevent further erosion of affordability.
Originally reported by Dina Sartore-Bodo in Realtor.
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