It seems like everyone is talking about the skyrocketing rent in the Denver Metro area. The population is growing steadily at about 1.5 percent per year. However, the number of for sale properties and vacant rentals have not increased at the same rate. This lack of supply and increase in demand is what is pushing rents upward.
In 2000 the average monthly rent for a one bedroom was $760, today the same property would rent for $1100. On the flip side the average mortgage in Colorado is $1056. So is it better to buy a home?
If you’re stable financially and planning on staying put for the next several years home ownership could be the best option. Often, renters have concerns when it comes to buying a home.
One common concern is the need for a down payment. The minimum down payment requirement for a conventional loan has been reduced to 3%, which means you may only need $6,000 down for a $200,000 home. There are also plenty of programs to help first time home buyers.
Another common concern is the cost of mortgage insurance. Recently, the FHA reduced their annual mortgage insurance fee by 0.5 percent. This equates to a savings of $80 per month on a $200,000 home.
The last concern I hear most often is about their credit score. With enough lead time and the proper plan you can improve you credit score which will help when looking to qualify for a mortgage.
Inventory and interest rates are still low and we expect prices and rates to continue to rise over the next several years. Waiting to purchase could cost you several hundred dollars a month, which could be thousands over the course of a 30 year mortgage.
If any of these are your concerns, we can put you in touch with a mortgage broker who can help you walk you through your options.