Credibility:

  • Original Reporting
  • Sources Cited
Original Reporting This article contains new, firsthand information uncovered by its reporter(s). This includes directly interviewing sources and research / analysis of primary source documents.
Sources Cited As a news piece, this article cites verifiable, third-party sources which have all been thoroughly fact-checked and deemed credible by the Newsroom in accordance with the Civil Constitution.

Inflation was on the brain this week, especially at the state Capitol. The rising interest rates — the Federal Reserve upped them again Wednesday — had the legislative budget committee learning “the risk of a recession in the next 18 months” is 50% higher than in June.

That’s according to the economic forecast presented Thursday by the governor’s Office of State Planning and Budgeting. The usual suspects were blamed: fallout from the war in Ukraine, ongoing inflation and the Fed tightening its monetary policy even as its chair Jerome H. Powell acknowledges that increasing rates “will also bring some pain to households and businesses.”

There’s always something new each week with the Colorado economy. And we’ll dive into how Coloradans are coping with higher prices below. But first, let’s look at how rising mortgage rates are affecting the local housing market.

>> Read the Colorado Economic & Fiscal Outlook report

Colorado houses cost more … or less

If this were 2019, the for-sale housing market in Colorado would be considered booming. Sellers are getting about 40% more than what they would have if they had sold their house three years ago. And even with the market cooling this year, the median price of a house sold in August was 10% higher than a year ago.

But higher interest rates did seem to affect potential buyers borrowing money to buy one. Interest rates for a 30-year-fixed loan were 6.62% on Friday, up from 6.35% from a week earlier, according to Mortgage News Daily. The Fed has raised rates five times this year, or a total of three percentage points. That includes three consecutive months of three-quarter point increases, a historically high increase for one meeting. In early June, the same 30-year mortgage rate was 5.55%.

Bankers had adjusted rates because the increases were anticipated so rates didn’t go up the same percent overnight, said Matt Leprino, head of real estate brokerage Remingo in Denver.

A house in Park Hill Denver on sale on Aug. 7, 2022. (Tamara Chuang, The Colorado Sun)

“I wouldn’t expect that today, it’s three-quarters of a point more expensive to buy a house than it was yesterday,” Leprino said. “But that doesn’t mean it doesn’t affect buyer confidence.”

Buyers are no longer snapping up houses within 12 days of hitting the market in Denver. They’re waiting 21 days. They’re not paying more than the seller originally asked for. Take a look at the home sales for August, between 2017 to 2022:

Leprino, being a Realtor, sees a bright side. 

“I hate it when people say the market is crashing because what I always will respond is: ‘To whom?’” Leprino said. “It’s a great, great opportunity. It’s better than it’s been in three years for buyers. Yes, interest rates are higher and prices are not as low as they used to be. However, people don’t have to pay above asking anymore and so it’s an opportunity for them to get in now. Yes, interest rates are higher than they were. But again, from a historic perspective, five, five and a quarter, it’s a really good interest rate.”

According to data from the Colorado Association of Realtors, the average seller is getting 99% of what they priced the house for, compared with 102% a year ago in Denver and the state. 

But median sales prices have also dipped each month this year since May, according to the organization’s data. Between May and August, the median sales price in Colorado fell 4.8% and 4.6% in Denver.

That’s the reverse of what happened in the past two years, when prices rose or stayed flat between May and August. But normally, Leprino said, median prices do decline over the summer as families try to get their move done before school starts

“It would be irresponsible of me to say (rising interest rates) had nothing to do with it, and I’m sure it did to a certain extent,” he said. “But looking at it from a historic perspective, prices are always lower in August. … It’s just seasonality in our market.”


Gas prices switch gears and go up

Gas prices hit their above $5-a-gallon peak in June before starting to fall back down to something a little more palatable in July. They dropped below $4 a gallon in Colorado. Then someone noticed they were back up again this week, ending a streak of declines “just short of 100 days,” The New York Times reported. 

AAA now has Colorado’s per-gallon prices at $3.753 for regular, which is up 8 cents from last week. (Anyone get gas for under $3? I found a service station selling gas for $2.88 — in Greenwood Village, no less!)

So what happened? AAA says unplanned maintenance work at refineries on the West Coast and Midwest are partly to blame. That aggravated a tight supply. However, if supply returns, gas prices could come down, the organization said.

So long sub-$3 per gallon of gasoline. The low price was gone a day after filling up at the Shell station in Greenwood Village on Sept. 6, 2022. (Tamara Chuang, The Colorado Sun)

Related stories from The Colorado Sun:

→ Expect to pay 54% more in natural gas bills: Xcel’s increasing prices on natural gas in December, translating to average bills jumping to $177 from $115, Mark Jaffe reports. >> Read story

→ Outreach to Colorado’s labor “bookends”: With 64,000 4- and 5-year olds eligible for free preschool this fall, early education programs statewide need help. So they’re reaching out to teenagers and retirees, Erica Breunlin reports. >> Read story 

→ State lawmakers have just $85 million for new initiatives. Most of the additional $1 billion budget for the new year is already claimed by existing funding plans. And that doesn’t account for the full impact of inflation, politics writer Jesse Paul reports. >> Read story


How Coloradans are coping with inflation

What’s Working asked readers how much does life cost you nowadays. And readers responded!

“Hamburgers at my favorite restaurant went up at least 30%,” said one person who filled out What’s Working’s cost of living survey

“M&M chocolate candies from $2.99 a bag to $3.99 a bag. That is ridiculous,” said Terry from Fort Collins. (That’s also a 33% increase, which is higher than the rate of inflation.) 

“I used to be able to buy milk for around $2.49 now it’s over $3.00,” said Debi from Denver.

“Bacon doubled in price, all food items have gone up. Even candy has gone up. I can’t afford,” wrote Diane Stone. 

Notice the trend here? A lot of folks commented about the cost of food. And overall, food took a hit, if you were to look at the results from our completely unscientific survey taken by 53 people: 47% cut back on eating out and at the grocery store.

In August, food prices were up 1% compared to last year, according to the Consumer Price Index for Midwestern states, which includes Colorado. For the year, they’re up 12.9%, the largest increase since February 1979, reported the Bureau of Labor Statistics. Some food categories that saw the largest increases compared to a year ago:

  • “Other” food at home, which includes sugar, sweets, oils: up 19.3%
  • Cereal and bakery products: up 17.7%
  • Meat, poultry, fish and eggs: up 11%
  • Food away from home, up 9.3%

“Getting fast food for my teenage daughter and I runs at least $20 now, so I can definitely prepare a great meal and have leftovers for lunch for less than that,” wrote Erin Hutchinson in Colorado Springs about how she’s dealing with higher prices. 

A chunk of folks, however, said inflation doesn’t affect them. They noticed it — and most cited the rise in gas prices and food — but they didn’t cut back on what they normally buy. Their shopping patterns may have changed a bit. 

One guy named Larry who hasn’t cut back said that, however, he started to “watch gas station prices when you drive by even when you don’t need gas.”

Tips from readers about how to save money: 

  • “Eat vegetarian a couple days a week. Good environmental impact, good health impact, and good financial impact as meat is expensive.” ~ Jacob from Centennial
  • “Be more thoughtful about food. Plan menus, waste less, stop buying junky snacks that cost a lot, make you fat, and keep you depressed.” ~ Polly Christensen from Longmont
  • “Shop sales at Sprouts and digital deals at King Soopers and plan menus around what’s on sale.” ~ Mitzi Hicks in Westminster
  • “Get solar and buy a used PHEV (plug-in hybrid vehicle).” ~ Mike from Boulder
  • “Shop the ‘orphaned’ veggies and fruit — especially the day after a new flyer comes out.” ~ Julie Cooley in Durango
  • “Get out your ‘casserole’ cookbook. Most cuts of meat are too expensive.” ~ Judy H.

And a few more that may interest readers: 

  • Apply for food stamps or other federal assistance. Nearly 14 million adults age 60 or older qualify for the federal Supplemental Nutrition Assistance Program, 3 million folks over 65 are eligible but not enrolled in Medicare and 30% to 45% of older adults may be missing out from another Medicare benefit, reports CNN. >> Read
  • Guaranteed income programs spread, The New York Times reports. There’s also one in Colorado called the Denver Basic Income Project, which offers up to $6,500 up front and $500 a month for 11 months to 260 individuals. >> Read NYT story, Denverite story, program details

Other working bits

Southwest Airlines flight attendants plan Denver picket. Southwest Airlines flight attendants plan to picket at 11 locations Tuesday, including Denver International Airport. Members of TWU Local 556 are seeking a new contract after their last one became amendable four years ago. 

Two Colorado lenders operating in underserved communities awarded $104 million: As part of the federal Emergency Capital Investment Program, First Southwest Bancorporation in Alamosa and The Native American Bancorporation in Denver were awarded $66.7 million and $37.4 million, respectively, to help support loans (or grants or forbearance) to small and minority-owned businesses and consumers in the communities. The community lenders can use the funds to provide low-income borrowers, “deeply affordable housing” projects and underserved small businesses. >> Details

About 2,000 Coloradans filed a new claim of unemployment last week: The U.S. Department of Labor’s tally of new jobless claims for Colorado was 2,061 (not adjusted for seasonality) for the week ending Sept. 17, up from 1,900 the prior week. By comparison, the weekly average was 1,900 new claims in 2019. Meanwhile, Coloradans receiving benefits grew by 1,437 in a week to 17,364 for the week ended Sept. 10. The weekly average was 18,600 in 2019. >> Data

Get paid $50,000 to move to Iceland? NPR mentions the job offer from Siggi yogurt. >> Listen


As always, share your two cents on how the economy is keeping you down or helping you up at cosun.co/heyww. See you next week! ~ tamara 

Don’t miss the free weekly newsletter on Colorado jobs and unemployment. Sign up: ColoradoSun.com/getww

Miss a column? Catch up:

What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww

Tamara Chuang

Tamara writes about businesses, technology and the local economy for The Colorado Sun. She also writes the "What's Working" column, available as a free newsletter at coloradosun.com/getww....