Denver housing has out-priced many of those searching for new homes, both to buy and to rent, causing many people to label it as nearly impossible to afford. So what makes Denver housing unaffordable? In a recent report by Zillow, Denver was ranked right at the top with California giants such as Los Angeles, San Francisco, San Jose, and San Diego for being unaffordable for both renters and buyers.
It comes down to two factors:
The percentage of an individual’s income that goes towards housing
The skyrocketing rental rates we’ve seen in 2015
According to the report, Denver renters put around 35% of their income towards rent, making it nearly impossible to save up for buying a home. This, of course, keeps them locked in the sphere of rentals, which increases demand in an already tight market. Compared to the national average, Denverites are shelling out nearly 20% more. And rates for apartments alone went up about 14% higher in the second quarter of 2015. Take into account the 13% increase in rent for single-family homes, and it’s not hard to see why people have labeled Denver housing unaffordable.
But this trend isn’t just locked into the rental sphere.
According to the report, it’s projected that about 28% of a buyer’s income will go towards paying their monthly mortgage, making it far more difficult to save that money away for that long-awaited rainy day.
Read the article here: http://www.bizjournals.com/denver/morning_call/2015/08/denver-rent-and-mortgage-costs-called-unaffordable.html?ana=e_den_rdup&s=newsletter&ed=2015-08-13&u=xs8BpDl8UKgix5cevRfy1Q0e685a40&t=1439498372