Whether you are in search of your forever home or simply looking for something that will allow you to getaway on weekends that is in arm’s reach of some fresh snow, it has never been a better time to buy your first house in Denver.
There are plenty of reasons why Denver is the place to buy your first house including an affluent growing start-up culture, amazing food and music, and splendid scenic views.
However, buying a home today also comes with its fair share of challenges. Many new homebuyers are also unsure about the trajectory of housing markets at both national and local levels.
If you are considering buying your first home in the Denver area but are concerned if now is the right time to buy, here is what you need to know.
Home Prices Show Signs of Stabilizing
Over the last two years the housing market has experienced amazing growth. Low mortgage interest rates and heightened demand for homes led to skyrocketing home prices across the country.
Denver has been no exception as house prices have consistently grown to outpace other comparable metro markets. This also meant a more competitive market, especially considering the record number of transplants that have relocated to Colorado areas over the last few years.
Yet, as the economy has now started to recover, home sales in Denver are starting to show signs of stabilization. In August, homes that were listed sat on the market longer than those in July1.
Longer days on the market (DOM) combined with anticipated interest rate hikes could mean waning consumer demand which would help alleviate some of the price issues in the Denver market.
Mortgage Interest Rates Remain Low
Despite talks to increase mortgage interest rates, Colorado mortgage rates continue to remain near historically low levels. First time home buyers can benefit from choosing a mortgage with a longer term to help make their monthly payment more affordable.
For those that can afford a larger payment, consider choosing a mortgage with a shorter term which will help reduce the amount of money you will pay in interest compared to mortgages with longer terms.
Increasing interest rates could also help taper home prices as there is a direct correlation between increasing rates and consumer demand. It will also force lenders to offer more competitive pricing as margins may begin to shrink.
New First Time Homebuyer Programs
First time buyers are getting more support than ever to help increase homeownership, especially among households with low- or low-to-moderate-income.
Aggregators Fannie Mae and Freddie Mac have maintained both the HomeReady and HomePossible conforming conventional first-time homebuyer mortgage programs for a few years now, allowing qualified borrowers to put as little as 3% down when purchasing a new home.
However, other institutions are now unprecedentedly starting to offer forms of assistance to help first time homebuyers purchase their first house. For example, Bank of America is now offering qualified home buyers closing cost assistance through their America’s Home Grant program2.
Even the federal government is getting involved and paving the way to knock down barriers to homeownership for new buyers. The proposed Down Payment Towards Equity Bill looks to provide qualified first-time homebuyers between $20-25,000 in down payment assistance4.
Many borrowers are concerned about the trajectory of the current housing market. If you are a first-time home buyer, you might be struggling to figure out if now is a good time to buy a home. Overall, there are several reasons why now is a good time to buy your first house in Denver.
While home prices remain a bit high, the Denver market shows signs of stabilization. Furthermore, mortgage rates continue to remain historically low making it an ideal time to obtain a new mortgage loan. Even if rates start to rise, they will most likely increase gradually and should help to taper home prices even further.
Lastly, there are several support programs in place to help your dream of becoming a homeowner a reality. From existing first-time home buyer mortgage programs to down payment assistance, buying a new house in Denver has never been easier.
Contact Skye Templin for all of your real estate needs in the Denver metro area. (:
1 Mulholland, S. (2021, September 03). It Took Homes 11 Days To Sell In Denver In August. That Might Be A Sign That The Market Is Slowing. Retrieved November 11, 2021, from https://www.cpr.org/2021/09/03/denver-real-estate-market-august-2021-trends/
2 Bank of America. (n.d.). Saving to Buy a Home? Here’s How to Find Help. Retrieved November 11, 2021, from https://promotions.bankofamerica.com/homeloans/downpaymentcenter?subCampCode=78905
3 Bundrick, CFP, H. M. (2018, August 08). HomeReady and Home Possible: 3% Down Mortgages. Retrieved November 11, 2021, from https://www.nerdwallet.com/article/mortgages/fannie-mae-home-ready-freddie-mac-home-possible
4 H.R. H.R.4495, 117th Cong. (2021).