The S&P CoreLogic Case-Shiller Indices for April show Denver with the 4th largest price gains year-to-date. Our market has seen an increase of 8.4% and only comes in behind Seattle, Portland and Dallas. The country overall is averaging a YTD increase of 5.8%, which is the fastest past in over three years according to David M. Blitzer, Managing Director and Chairman of the Index Committee. 

The chart below shows the Denver market’s price appreciation over the last 5 years. The numbers on the left represent an index created by CoreLogic to measure the average change in home prices in a particular geographic market. A key factor to these steady gains has been our booming population outpacing housing supply.

Some may see these dramatic increases and worry that we are on the cusp of another housing bubble. However, the home appreciations that we saw come crashing down over ten years ago were driven by much different circumstances. The primary factor back then was lending requirements being too lenient, leading too many people to buy homes they couldn’t afford.

Today, prices are being driven by a lack of supply and historically low interest rates. People are finding more purchasing power due to current rates, but lending restrictions are ensuring that they are in fact able to afford those homes. While an increase to interest rates could negatively impact home prices, it is much more likely to slow their appreciation, not send values on a downward spiral.