State’s income gains fall below average
Rising population, housing costs problematic in subpar growth
Personal incomes in Colorado are rising at a slower rate than the rest of the country this year, according to first-quarter numbers from the U.S. Bureau of Economic Analysis.
Personal income consists of the wages people earn from a job or the payments from a business they personally own, as well as the money made from rents, dividends, interest and royalties. Government payments such as Social Security also are counted in the mix.
In Colorado, personal incomes, not adjusting for inflation, rose 0.9 percent in the first quarter from the fourth versus a 1 percent gain nationally, which pushed Colorado down to a 38th-place ranking among states.
Since the start of 2010, quarterly personal income gains in Colorado have outpaced U.S. gains 21 times, matched twice and lagged six times. Four of those six lagging quarters have come since 2015.
Falling behind on income growth is problematic for Colorado because of a population that is growing at a rate twice as fast as the country as a whole. Looking at personal income gains on a per capita basis, the U.S. saw a 0.9 percent quarterly gain in the first quarter and Colorado saw only a 0.5 percent gain, which ranked 44th among states.
The other problem with subpar income gains is that they don’t allow households in the state, especially along the Front Range, to keep up with the sharp rise in housing costs.
Home prices appreciated at an 8.2 percent annual pace in Denver in April, the fourth-fastest rate of any major metro, according to the S&P CoreLogic Case-Shiller Indices.
Higher home prices combined with higher interest rates have lifted the mortgage payments on a typical Denver home by about 15 percent compared with a year ago, estimates CoreLogic.
Rent inflation hasn’t been as extreme the last few years. Annual apartment rent gains were running under 1 percent in the early part of the year, but a report Monday from ApartmentList found that they jumped 2.4 percent in Denver and were rising 3.5 percent statewide in June.