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Front Range Real Estate Market Update, January 20, 2022

ATTOM Data Solutions just came out with its detailed 2021 U.S. Home Affordability Report, which includes information about affordability in the Denver metro area. In all the Colorado counties covered by the study, homes are less affordable now than they have been in the past few years.

Let’s look at just two of those counties – Denver and Jefferson. In Denver, wages have grown more than 10% year-over-year, while the median home price is up 8.2%. The big rise in wages helps home buyers. In Jefferson County, wages went up 7.1% while home prices rose 11.5%. ATTOM estimates that in Jeffco, typical buyers would pay 36.8% of their wages to buy a typical home. In Denver, they would pay 30%. Lenders generally prefer that buyers pay no more than 28% of their income toward the mortgage payment.

How does homeownership compare with renting, though?

In Denver, Zumper shows that the typical rent for a 3-bedroom is $2,700. That’s risen 8% in the past year. The typical 3-bedroom home that closed in December sold for $515,000. A buyer with a 740 FICO score, who put 5% down to buy that 3-bedroom home would finance $489,250. With a 3.5% interest rate, the payment on the principle and interest would be $2,232. Mortgage insurance would cost $143 per month. Taxes and insurance could be about $200 per month each. This buyer’s monthly payment would total $2775, just $75 more than renting.

The monthly cost of renting in Denver is comparable to buying. For smart buyers, purchasing a home could be more affordable than renting. 

Upfront costs to purchase a home are higher than upfront costs to rent, but monthly payments may be similar, and. as a homeowner, you get additional benefits. You build equity and have the freedom to make improvements to your home, for example. Your taxes, HOA fees, and insurance costs can change, but a fixed-rate mortgage can give you stability and help you budget for the future.

Ready to make your move? Give us a call. We’ll help you get started. Reach David and Tom at 720-408-7409.

Special thanks to Ashley Peterson, Loan Officer, for helping make sure our numbers are correct.

Metro Denver Real Estate Market Activity

[one-half-first]During the last week:
New Listings – 721
Back On Market – 117
Price Increase – 189
Price Decrease – 140
Pending – 1249
Withdrawn – 69
Closed – 849
Expired – 66

[/one-half-first][one-half]Previous Week:
New Listings – 647
Back On Market – 122
Price Increase – 144
Price Decrease – 108
Pending – 1214
Withdrawn – 64
Closed – 998
Expired – 88

Based on data from REColorado®[/one-half]



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