First-time Denver home buyers find steep mortgages, less competition
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Navigating Denver's housing market, especially as a first-timer, isn't easy.
By the numbers: The share of first-time buyers in the U.S. has reached record lows — dropping from 34% to 26% from 2021 to 2022 — as inventory and affordability issues persist, per a report from the National Association of Realtors (NAR).
State of play: Home prices are cooling in Denver, but mortgage rates have forced some would-be-buyers to the sidelines.
- If you buy a $500,000 house with 3% down, your monthly payment on a 30-year fixed-rate loan with 3% interest would be $2,986, per Freddie Mac.
- With 7% interest, it would be $4,168.
Yes, but: This summer is friendlier for Denver buyers than last. At the $600,000 price point, Denver-based real estate agent Libby Levinson saw eight to 10 offers last year. Now there are typically one to three, she says.
- So if buyers can afford monthly payments, the lack of competition gives them room to negotiate on the price.
The intrigue: If you decide you want to buy, you can work with a mortgage lender to determine how much you can afford and get pre-approved, Levinson says.
- For a $600,000 house, buyers need around $46,000 in cash. That includes 3.5% down, $5,000 in closing costs, $500-$900 for an inspection and $600-$1,100 for an appraisal, Levinson says.
- She recommends having another 3% for furniture or any updates you want to make once you're in the house.
Zoom out: First-timers also are waiting longer to buy. The median first-time buyer age jumped from 33 to 36 from 2021 to 2022, per the report.
- Saving enough for a down payment is the largest barrier to entry, says Brandi Snowden, a NAR director.
- Many would-be buyers are saddled with debt, including student loans, car loans and credit card debt.
It'll take Colorado buyers 11.7 years to save up for a 10% down payment on the typical home, Zillow data show.
- In the Denver metro area, the length of time grows to 12.5 years.
- The U.S. average is 8.9 years, with states like Iowa as low as 5.2 years and Hawaii as high as 18.4.
Bottom line: The right time to buy is when it's right for you.