As home prices have continued to soar across Colorado, many of the buyers we meet with for an initial consultation are on the fence about if it makes more financial sense to buy a home or if they are better off with a rental. The choice can often be difficult, however, it is still a great time to buy in Colorado Springs. Rent prices have increased the past few years along with home prices and current interest rates are still very low making homeownership relatively affordable. According to a recent report from Trulia, low interest rates make buying an average of 37.7% less expensive than renting.
1. It is Expensive to Rent a House
The Colorado Gazette recently reported that rent prices in Colorado Springs are at a record high. This means that as home prices have increased, those investors who own the rental properties have been able to increase rents due to the increase in demand. It’s the renter who is essentially buying the house for the investor. Why not put that payment toward a mortgage instead and gain some equity in your home.
2. Interest Rates are Expected to Rise Along With Home Prices
Interest rates have already begun to rise a bit and with the Trump presidency, it is likely that mortgage interest rates will continue to rise the next few years. It is also expected that home prices in Colorado Springs will rise over the next few years, which will make homes less affordable. You’re better off locking in an interest rate and purchase price at today’s rates and prices vs. waiting.
Check current interest rates at wells fargo to see where they’re at today: https://www.wellsfargo.com/mortgage/rates/
3. Are we in Another Housing Bubble
No, the issues that contributed to the bubble in Colorado Springs during 2007 – 2010 and the subsequent housing crash are not present in today’s housing market. Bad lending and loose standards by the banks are what contributed to the market crash. The market during that time was really driven by investors and buyers who were not a good credit risk. This practice along with no money down loans and adjustable rate mortgages created a situation that was bound to fall apart. During the years after the bust, there were very few new homes being built and this created a lack of housing options for buyers in today’s market. This has contributed to the increase in prices over the past few years.
If you have been thinking about buying a house or are interested in getting out to view the current homes for sale in our community of Colorado Springs, we would be happy to connect you with a great real estate agent who can show you around and answer all of your housing questions. They can also help you to get qualified for a mortgage. This will give you an idea of what price homes to look at.
If you are still on the fence about if it makes more sense to buy a home vs. renting a home. There is a youtube video that discusses the pro’s and con’s of each.