Summary: With steadily rising home prices and relatively low mortgage rates, many Denver residents are now asking the question: Should I buy a house in Denver, Colorado in 2020? This article will help you get closer to making that decision.
Denver is a desirable city to live in, and the 620,000 people who live here can attest to that. But if you had a home purchase on your mind recently, you may have wondered if you should finally make that purchase in Denver in 2020. Based on the current temperature of the market, price predictions, and low interest rates, 2020 absolutely may be the perfect time to buy.
According to mortgage-buying corporation Freddie Mac, the average rate for a 30-year home loan sits at 3.49%. The same time last year, rates were at 4.39%. That’s quite a difference that can help save borrowers tens of thousands of dollars on their home loans.
Home prices in Denver, meanwhile, are starting to rise after not really heading anywhere over the past 12 months.. This means that those who postpone their home purchases until later in 2020, or early 2021, might encounter higher housing costs. So one could argue that now is a great time to buy a house in Denver, as we continue to head further into 2020
Should I Buy a House in Denver in 2020?
Should you buy a home in Denver this year? There is no simple “yes” or “no” answer to this question. It’s the kind of question that must be considered on an individual basis, due to the many variables involved.
But for many would-be buyers, current conditions in Denver are ideal for buying a home. Here are some recent real estate market and mortgage trends to help you decide if you should buy a home in 2020.
1. Mortgage rates are hovering near historic lows.
Mortgage rates are lower now (February 2020) than they were at the start of the year, as already mentioned. The average rate for a 30-year fixed mortgage fell to 3.49% during the week of February 20, 2020. That’s a decline of 0.23% from the start of this year and a decrease of 0.86% from the same week in 2019. In fact, we haven’t seen rates this low since early 2018.
Looking forward, analysts expect rates to remain under the 4.0% mark throughout 2020 and average about 3.8% by the end of the year. So, from a mortgage rate perspective, now could be a good time to buy a house in Denver, Colorado.
2. Denver home price increases have slowed (but are expected to pick up again).
The Denver real estate market generated a lot of headlines over the last couple of years, mainly because of rapidly rising home prices. That said, according to the real estate information company Zillow, the median house value in Denver only rose by a mere 0.4% over the last 12 months alone (as of February 2020). And the price is actually about double today than what it was in 2011.
Having said that, home prices are expected to pick up the pace again in 2020. Zillow predicts that prices may increase by 3.6% over the next year.
As for the whole rent-versus-buy question, consider this. The median rent in Denver is $2,150. If you were to buy a house in Denver at the current median price of $454,900 with a 10% down payment at today’s mortgage rate for a 30-year fixed-rate mortgage, your mortgage payments would be $1,830 per month. You could actually be paying less by owning as opposed to renting.
3. The Denver market has cooled (but won’t stay that way).
As already mentioned, the housing market in Denver has cooled. And even though prices in Denver may have barely increased over the past few months, the rate of increase has markedly weakened compared to years past. The recent changes in conditions in the market means buyers can get more bang for their buck.
Denver is notorious for having home price increases that have steadily outpaced wage increases, and given the recent slow in price growth, the market seems to be shifting in favor of buyers.
As such, now may be the ideal time to get into the market and take advantage of plateaued prices and historically low interest rates before they start on an upward trend once again. This is especially true considering the fact that prices are expected to pick up the pace somewhat in 2020. Buyers who get in the market now can take advantage of stagnant prices and benefit from an increase in appreciation as their home properties increase in value over the coming months and years.
First-time buyers who are wondering if they should buy a house in Denver in 2020 should pay close attention to this trend. Houses in the metro area will likely be more expensive next year than they are now. Here’s more advice for first-time buyers.
Do You Need a Mortgage to Finance a Home Purchase in Denver?
Are you thinking if buying in Denver in 2020? Knowing how much you might pay each month will help you determine if now is the best time to buy. At Sammamish Mortgage, we can give you a personalized mortgage rate quote, along with a breakdown of your estimated monthly payments. We service all of WA, CO, ID, and OR, and have a number of mortgage programs to offer. Please contact us to get started.