It's that time again...when we're making our lists of goals and New Year's Resolutions and vowing to improve our lives by losing weight, saving money, organizing our closets and getting our bootys to the gym.
If making a move is on your list, you might be considering whether to rent or buy, so we thought we would break down a few reasons why buying a home in the Denver Metro area might make sense for you in 2016.
Interest rates are still low.
Interest rates on home loans are at historic lows, with a30-year fixed-rate home loan still hovering around 4%.
It is likely that we'll never see interest rates this low again. So, even though Denver area home prices have gone up in the last couple of years, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage if you buy while rates are crazy low.
Rental rates are still rising.
According to the2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016.
In Denver, low rental vacancy has driven rental rates up to the point that renters are often paying more to rent a place than they would on a mortgage for a comparable property.
Home prices are stabilizing.
For the first time in years, prices that have been climbing steadily upward in the Denver area are stabilizing, restoringa level playing fieldthat helpsbuyers drive a harder bargainwith sellers, even in heated markets. Check out our latest Market Reports for more detail. Who knows what will happen in 2016, but we are predicting a more balanced and sane marketplace.
Down payment programs are available.
Saving for a big down payment can seem nearly impossible, butthanks to a variety of programs to help home buyers it doesn't have to be. For instance, the newFannie Mae and Freddie Mac Home Possible Advantage Programallows for a 3% down payment for credit scores as low as 620. Contact us for more details about these programs.
Mortgage insurance programs are also available.
If youput less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). But, it might be possible for you totake out aloan from the Federal Housing Administrationa government mortgage insurer that backsloans with down payments as low as 3.5% and credit scores as low as 580. Thefees are way down from 1.35% to 0.85%of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way.In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them?
If you are currently shopping for a lender, make sure that they are aware of all these options and willing to help you take advantage of them!
Owning a home is a major tax break.
Tax laws continue to favor homeowners,so you're not just buying a place to liveyou're getting a tax break!The biggest one is that unless your home loan is more than $1 million, you candeduct all the monthly interestyou are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes. Check with your accountant to make sure that you are taking advantage of all of these tax-saving opportunities as a homeowner.
Inventory is expected to increase in 2016.
We've been in a bit of a housing squeeze for the last couple of years in the Denver area. Multiple offers, bidding wars, unlisted deals and crazy competition has been the name of the game, making it difficult for buyers to secure a great deal, and keeping sellers on the fence because they couldn't find a new place to move to. Indicators are pointing toward a more balanced market in 2016, so start your home search now to keep an eye on new listings!
New homes are being built at record pace.
According to one of our favorite local resources, Denver Infill, new apartments are being built all over the place, particularly in Downtown Denver.
"What should we expect for multifamily housing development in Downtown Denver in 2016? Mostly likely, more of the same steady growth we've seen since 2012. Some of the factors to consider are job growth, population growth, vacancy rates, and the possible effects of construction defects reform.
Denver's unemployment rate iscurrentlyavery low 3.2%and job growth in 2015 has beenrobustandstrongerthan first reported. Downtown Denver has also beenvery successfulin growingcompanies and luring firms relocating from the suburbs or from out of state. Apartment vacancy rates arestarting to rise, and with several thousand new units to be added to Downtown's apartment inventory in the coming months, the vacancy ratemay rise to the point of discouraging new developments from moving forward. However, higher vacancy rates couldeventually cause some downward pressure on rents, making urbanliving a bitmore attainable for many who are currently priced out of the Downtown market."
This doesn't even take into account all of the Single Family homes planned for construction up and down the Front Range, filling in the suburbs and delivering the product that buyers are demanding. So, if you've ever dreamt of watching your home being built from the ground up, on the lot and with the finishes of your choosing, 2016 might be the year your dreams come true.
Home equity builds future wealth.
Be honest for a minute: throwing your hard-earned cash at your landlord's mortgage isn't exactly your idea of a good time. And if you keep doing it, you'll never make that climb up the property ladder that will enable you to eventuallybank on your home's equity for your retirement years. The sooner you make the jump to homeowner, the earlier you'll be able to cash in on the appreciation you've earned, even if you don't plan to stay in the first home that you buy forever.
You might even want to consider a biweekly mortgage plan to pay down your loan even faster.
Denver is an awesome place to live.
We love living here. But don't just take our word for it!
Reasons to Love Denver- 5280 Magazine
12 Most Mile High Reasons to Love Living in Denver - 12Most.com
Best Big City in the West - Money Magazine
The 15 Hottest Cities in America - Business Insider
Check out our Denver neighborhood guide, too!
What do you think? Ready to make a move in the Mile High? We're here to help - whether you are ready to buy a big house in the suburbs or to rent a sweet pad in the city, if you'd prefer acreage over walkability, or if you want to find a place above your favorite coffee shop. Start your search online now, or reach out to start unlocking some doors or asking some questions. We'll just be over here refreshing our inbox waiting to hear from you.
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