The average home mortgage payment in Denver increased by nearly 33% last year, surpassing the median rent amount in the city, according to the latest monthly figures from Realtor.com.
Denver’s average monthly mortgage payment currently stands at $2,540 compared to its median rent payment of $1,875, the data shows. The figures ranked Denver seventh highest on the list of cities where it’s more favorable to rent a starter home than it is to buy one.
The Federal Reserve Bank has said it could increase interest rates as many as four times this year, which could reduce home-buying activity.
“As mortgage rates continue climbing, those looking to buy their first home in 2022 are more likely to find lower costs now than later in the year, but home selection is expected to improve as we move toward spring, when many homeowners target listing their home for sale,” said Danielle Hale, Realtor.com’s chief economist.
The lower median rent may be only a short-term victory for people seeking housing, Hale added. Realtor.com forecasts that rent will grow by 7.1% nationwide compared to a 2.9% increase for home prices.
First-time homebuyers may struggle to enter the housing market as well as the cost of mortgages slowly increases alongside interest rates, according to Hale. This could be offset if more homeowners decide to list their properties this spring, which is traditionally a busy time in the real estate market, she said.
In November 2021, Seattle-based real estate firm Redfin found the city’s average rent at more than $2,500 while the average mortgage payment was around $2,100 per month.
