Homeownership is a crucial wealth-building asset, but many potential homebuyers in Colorado are being priced out by sky-high monthly mortgage payments costing more than monthly rent—sometimes by over $700. If a homebuyer can afford the 20 percent down, they can lower the payments to less than rent. But that doesn’t help those who are already struggling financially. If you can’t pay the monthly payments, you probably cannot pay a downpayment almost double the typical price.
Along much of the northern Front Range, renters will pay less per month if they keep renting rather than trying to buy a comparable home, according to an analysis from Meyers Research.
The exception is if they can put 20% down on a property in metro Denver, Greeley and Colorado Springs using a 30-year mortgage with a rate that is 4.5% or lower. Then they can end the month with some extra cash.
In Fort Collins and Boulder, however, they won’t come out ahead, even with 20% down. Owning will always require more cash out of pocket.
“This is just talking about now vs. now,” said Ali Wolf, director of economic research at Meyers Research, who put the analysis together.