Manager / Senior Mortgage Planner / Colorado Attorney

Brian G. Murphy


Brian G. Murphy

Denver has “one of the worst rental affordabilities across the entire nation”

The Denver Post substantials our read of the Denver rental and home markets:

“Denver-area rents are soaring three times faster than the U.S. average — a trend making Denverites more likely than their national counterparts to give up rental payments in favor of a mortgage.

The movement is occurring even though prospective homebuyers face an entirely separate set of challenges with rising home prices, low inventories for sale and the difficulty of coming up with down payments.

“In Denver you have one of the worst rental affordabilities across the entire nation,” said Svenja Gudell, Zillow’s senior director of economic research. “Rents are rising like crazy, but housing appreciation also is very strong.”

Rents in Denver have soared in the past year. While national averages for a two-bedroom unit are up 2.7 percent, prices in the Denver area have jumped 9 percent since last year. That growth far outpaces other major metro areas.

A recent report from Apartment List found that the city of Denver’s average rent of $1,390 for a two-bedroom unit makes it the 11th-most-expensive major U.S. city.

On balance, Gudell said, many renters see home ownership as a preferred option — if they can afford it — because they view gains in housing values as sustainable.

The Zillow survey polled 180 Denver-area renters. Fifty percent described themselves as “confident” in their ability to afford a home, compared to 38 percent who expressed confidence in a broader national survey.

Would-be buyers will have their work cut out.

Denver’s hot for-sale market has driven costs beyond the reach of many low- and moderate-income households. The median sale price in Denver jumped 17 percent in the past year, from $280,000 to $329,000.

“There is a severe shortage of homes under $300,000,” said Anthony Rael, a Re/Max Alliance broker and chairman of the market trends committee of the Denver Metro Association of Realtors.

Despite the tight supply, he sees many renters ready to jump into the ownership market.

“They see paying rent as money going out of the window,” Rael said.

Relatively low mortgage rates and rising household incomes are helping mitigate a portion of the sticker shock that first-time buyers experience when they jump into the market.

Rael noted that in addition, lenders are easing credit requirements and some buyers qualify for down-payment assistance programs.

He cautioned prospective buyers to resist the simple temptation of comparing their monthly rent with monthly principal and interest payments on a mortgage. An equitable comparison needs to take into account home ownership costs including property taxes, insurance and condominium and homeowner association fees.

Call or write for a free, no obligation Rent Vs. Own comparison to see how much you might save (??) by owning vs. renting.


Brian G. Murphy, JD BA
Manager / Senior Mortgage Planner
Front Range Mortgage, LLC
NMLS #378844 / CO MLO #MB100020928

(303) 524-9907 Denver
(719) 540-2020 Colorado Springs
(877) 524-9269 Fax

About The Author

Brian G. Murphy

Brian G. Murphy

Brian G. Murphy is Manager & Senior Mortgage Planner, former Colorado Consumer Attorney (with concentration on Credit reporting and FICO scoring), Leadville Trail 100 past finisher and Sponsor & Father of five (don't be late for dinner). Email Brian or click to get a free, no-obligation rate quote. You can also find Brian on Twitter and Google+.

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