Waiting for prices to go down?  Think again!  Colorado mortgage rates are at their lowest ever.  Rates are at approximately 2.75% for people with good credit and low debt to income.  The amount home prices would need to drop to match a rise in rates is very large.  The charts below show just how much rates impact your buying power.

If rates go up, the amount you can afford to keep your monthly payment the same goes down.  Likewise, we can do the same and show just how much prices would need to drop to match a rate increase of just 1% more.  At 2.75% you can afford approximately a $550000 house paying $2245 per month.  If rates go up to 3.75%  prices would have to drop about $60000 to match the rate increase.  Is that likely to happen in Denver?  NO!  

Home prices in Denver have been steadily appreciating. The median home price in Denver is $539,252. Over the past 5 years homes have appreciated an average of 7.5% each year.  Even if the market was to stabilize or turn into a buyer's market, the likelihood of prices depreciating 11% is small. This is an approximately 11% drop.  We have so low inventory in Denver right now, that if no one else put their house on the market we would run out of listings in about 1.5 months. For a balance market, we would need 6 months worth of inventory.  People love Denver, and there is no shortage of people moving in, and staying here. If we were to go into a Great Recession like 2008, prices did drop 13%.  The chance of that happening is very small.  So, should you wait to see what happens?  Sure, but the most likely occurance is that rates will go up, and your buying power will go down.  NOW is the time to buy!

Contact me: Hope Stafford

970-217-4895

Hope@HopeHelpsRE.com