You hear it all the time on the radio: it’s cheaper to buy than it is to rent in Denver. But in a recent article published by the Denver Post, Denver renters may want to hold off on cashing in on their savings for a down payment for that new home purchase. Home prices in Denver and a few other metros across the country, including Dallas and Houston, are now at risk of decline and are coming close to being in need of a price correction in the months and years ahead, so it may be best for renters to hold on to their savings and wait rather than writing out that massive check for a down payment.
To Buy Or To Rent? That is the Question!
According to the article, there’s a high percentage, 70% according to Ken Johnson, a real estate economist with the University of Boca Raton, Fla, that renter’s will be better able to save more on average than buyers. This is due to the price correction many economists are predicting for Denver’s housing market.
Why The Price Correction?
Denver’s housing market has seen some of the sharpest home price gains nation wide over the last year. But as home prices keep hiking up, the average income hasn’t been so lucky. Eventually, something needs to give, and it will most likely have to be the prices. As prices go up and income stays steady, the risk of seeing a a major price correction increases.
So Then What?
The best scenario possible, according to the Denver Post article, would be to see prices start to slow down and level out for a time giving income a chance to catch up. The exact time and to what extent this will happen, of course, is unknown, but Johnson predicts that prices will go down.