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DENVER — The high cost to buy or rent a home is one of the biggest challenges in Colorado right now. But experts say the Denver metro is showing signs of a much healthier housing market.
In fact, the website Smart Asset just ranked three Colorado cities among the top 10 in the nation for healthy housing markets. Colorado Springs came in at number 3 on the list, with Aurora in 7th place and Denver in 9th.
Denver7 spoke to the senior economist for the housing website Zillow, Aaron Terrazas. He says Denver is in a lot better shape than many big cities right now.
"Denver home values are appreciating about 7.9 percent, year over year, that’s just a hair below the national pace of 8.1 percent," Terrazas said.
He adds that Denver home values are currently about 1.8 times the national median.
"The markets people are really worried about are 3 to 4 times the national median, so Denver is more expensive than it has been historically, but by national comparison still relatively affordable."
Zillow predicts home appreciation to slow in the Denver metro to around 6 to 6.5 percent in the next year. It's a sign that supply is keeping up with demand. Building permits and construction jobs are up in the Denver metro.
"Home builders are able to build here more than they are in other places," Terrazas said.
Still, with the median price of a home in Denver around $416,000 many people are priced out of the markets. A handful of suburbs, including Aurora, Thornton and Westminster offer more affordable homes. But several suburbs, like Littleton, Parker and Castle Rock, have median home values higher than Denver. 70 miles south of Denver, in Colorado Springs, the median home value is $275,000.
Rents are also on the rise. The latest numbers from the Apartment Association of Metro Denver show the average monthly rent in the metro area is $1,420.
Earlier this year, Zillow calculated the break-even point for buying versus renting in the Denver metro area. It makes sense to buy only if you plan to live in the home longer than 2 years and 3 months, Zillow said.
Mortgage rates have been ticking up, currently about 4.5 percent, which increases the average monthly mortgage payment in Denver about 50 dollars a month from the beginning of this year.
Top 10 healthiest housing markets in the U.S., according to Smart Asset:
- Buffalo, NY
- Fremont, CA
- Colorado Springs, CO
- San Jose, CA
- Aurora, CO
- Mesa, AZ