Renters in Denver may need 12 years to save up enough for a 20 percent down payment, says a new study from Zillow's real estate listing website Hot Pads.
The current U.S. median home value is $216,000, but the Denver median home value is $398,000. The average renter in the Mile High City would need to save up $79,600 to reach the 20 percent down payment threshold. Joshua Clark, economist at HotPads explains to The Denver Post that home and rental prices are continuing to appreciate rapidly, making saving up for a down payment even harder. “Home prices are outpacing incomes in many of the country’s largest markets," said Clark; home values increased eight percent over the past 12 months, and are expected to gain 6.5 percent over the next 12.
Rising rental costs make it even harder for renters to save for a down payment. Nationally, the median rent is $1,480 per month, up 2.5 percent from a year ago. Experts recommend spending no more than 30 percent of income on housing expenses, but the typical U.S. renter spends 34 percent of their income on housing. Denver’s median rent is $2,085, with the percent of income spent on housing at 43 percent.
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