Denver Leads as a Hottest Home Market 

Making the life-changing transition from renting to owning follows major research and decision-making. One of those choices is your home buying location – and what better city to buy a home than Denver, which was ranked the no. 1 hottest real estate market for 2016?

The top home markets across the nation were rated based on Zillow’s Home Value Index (ZHVI) Forecast, recent income growth and low unemployment rates. Denver took the top spot with 5 percent forecasted home value growth throughout the next year and a low 3.1 percent unemployment rate across the entire metro area.

The hottest submarkets include Delmar Parkway, Highline Villages and Centretech in Aurora with Ruby Hill placing high among neighborhoods in the entire metro.

Before packing your bags and relocating to Denver, future home buyers need to crunch the numbers and learn about their buying power. Developing a housing budget helps determine whether it’s best to rent or buy a home in Denver, assisted by the breakeven horizon – or the number of years it takes for buying to become cheaper than renting the same home.

Cost of buying in Denver

The median home value in Denver is $343,800, an impressive 15.3 percent rise from one year ago. If a homebuyer were to put 20 percent down on a median-priced home in Denver, or $68,760, assuming a 30-year fixed loan at a 3.508 percent interest rate, they would pay $1,647 per month. The total mortgage payment includes principal and interest ($1,236), insurance ($67) and taxes ($377).

Cost of renting in Denver

Assuming you’re looking to rent an apartment in Denver at a median value, you would pay $1,959 per month. In the wider Denver metro, renters pay a median $1,977 per month. Compared to the national median of $1,388 per month, rental rates in Denver are costlier, but keep in mind Denver is a buzzing city and U.S. medians include rates from towns across the entire country.

When does buying outpace renting?

While the example mortgage payment of $1,647 per month is lower than the median city rent rate of $1,959 per month, it is still cheaper to rent first when accounting for the down payment of $68,760. In addition, the cost of buying goes beyond monthly mortgage rates to encompass closing costs and the general fees of homeownership, like maintenance.

In Denver, the breakeven horizon as of the last quarter of 2015 was 1.7 years, a 0.09 rise from the year prior. So, if you’re planning to stay in a home longer than 1.7 years it’s more cost-effective to buy.

Overall, if you have the recommended 20 percent down payment ready, buying a home in Denver now could be a great investment opportunity. However, this is assuming you perform the proper home buyer due diligence.

Keep in mind, you typically don’t need 20 percent upfront to buy a home (depending on your lender pre-qualifications), but a heftier down payment ensures a lower interest rate. If you aren’t quite financially prepared to buy, renting below budget to save before those 1.7 years are up is your best bet in the meantime.

By Jennifer Riner, Zillow

 

Denver Real Estate Agents        Colorado Rentals 

About 

Stephanie Iannone, ABR, CNE is a Colorado Realtor, Managing Broker and Owner of the Iannone Real Estate Group and Housing Helpers of Colorado. Named Distinguished Realtor of the Year and Top 25 Salespeople in Colorado by Colorado-Biz Magazine. Stephanie Iannone and her team of experienced real estate agents serve home buyers, sellers, and real estate investors throughout the entire front range of Colorado.
Contact Stephanie:
Stephanie@housinghelpers.com
(303) 641-7484
www.stephanieiannone.com

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