Colorado forecast warns of shrinking labor force and weakening housing market

Colorado’s labor force fell 1.5% from a year earlier through April 2026, while average single-family home prices dropped more than 7%, according to the Colorado Legislative Council’s June 2026 economic and revenue forecast. The report identifies slower population growth and a declining labor supply as major factors shaping the state’s economic outlook.

The figures provide Colorado policymakers with the latest authoritative statewide baseline for budget, revenue and public-service planning. They also point to two developments with broad consequences: fewer available workers to support employers and services, and a housing market that is weakening after years of rising prices.

A smaller labor supply

The forecast says Colorado’s labor supply continued to decline, with the labor force down 1.5% year over year through April. A shrinking workforce can constrain employers and limit the growth of income-tax collections, although the sources do not establish the precise statewide revenue effect of the decline.

The report also connects the labor-supply problem to slower population growth. That combination can put pressure on economic growth and on the availability of workers in sectors that residents depend on, including health care and other services.

Health-care demand is expected to rise as Colorado’s population ages. That creates a potential mismatch between growing need for care and a labor pool that the forecast says is contracting. The forecast does not provide a specific statewide count of unfilled health-care positions or quantify the staffing effect.

Home prices are falling, but affordability is not settled

Average single-family home prices were down more than 7% from a year earlier in the April data cited by the forecast. The report’s statewide figure does not mean every Colorado community or every type of property experienced the same change; the decline varies by region and property type.

Lower prices can affect household wealth, construction activity and local tax bases. But the decline alone does not establish that housing has become affordable for all buyers. The forecast instead places the housing change within a broader economic picture that includes slower population growth, labor constraints and continuing pressure on household costs.

A December 2025 University of Colorado Boulder forecast had projected continued growth in 2026 while warning about labor-supply constraints, high housing costs, affordability and health-insurance pressures. The later Legislative Council report documents a more specific labor-force and housing-market deterioration in data through April.

State planning and health-insurance action

The Legislative Council forecast covers the 2026 state fiscal and economic outlook and is used for state budget and revenue planning. It is a forecast rather than a final accounting of Colorado’s economic results, and it may be revised as additional data arrive.

Separately, the Colorado General Assembly’s SB26-178, titled the Health Insurance Affordability Measures law, directs additional funding and reporting related to the state’s health-insurance affordability enterprise. The measure requires analysis of premium reductions and income-based assistance. It also transfers $40 million from marijuana tax cash funds and changes the emergency-reserve designation.

That action comes as the state’s economic outlook highlights both labor constraints and health-care pressures. The approved materials do not establish that the law will offset the labor-force decline, reduce premiums by a particular amount or resolve health-care staffing needs.

What comes next

For state officials, the immediate next step is continued use of the June forecast in fiscal and revenue planning while economic data are updated. The forecast’s estimates remain subject to revision. Future reports will help determine whether the labor-force contraction and housing-price decline persist, change direction or affect state revenues more substantially than currently documented.