Between higher mortgage rates and higher home prices, buyers of a typical home in metro Denver faced monthly payments 21% higher at the end of March than at the start of the year.
Between higher mortgage rates and higher home prices, buyers of a typical home in metro Denver faced monthly payments 21% higher at the end of March than was the case at the start of the year, according to aGoing back a full year, would-be buyers in metro Denver are now paying 42.2% more, ahead of the 38% increase averaged nationally. As big as Denver’s monthly payment increase is, other areas are higher.
“Higher mortgage rates were anticipated this year, but the speed of their rise has been breathtaking,” said Jeff Tucker, Zillow senior economist, in a release. “There will be a point when the cost of buying a home deters enough buyers to bring price growth back down to Earth, but for now, there is plenty of fuel in the tank as home shopping season kicks into gear.”
The analysis set a typical home value at $627,072 in metro Denver, which is up 24.3% over the past year. It also assumes a buyer made a 20% down payment, which is getting harder to pull off the more prices rise. Zillow lists the monthly mortgage payment in that scenario as $2,445 in metro Denver, which is much higher than the U.S. average of $1,316.
Given that mortgage rates have gone even higher in April, the gap is getting even wider. If there is a plus side, it is that higher costs have reduced the competition and boosted supply. The inventory of homes available for sale in metro Denver grew 30.5% between February and March, but remains 4.6% lower than a year ago, according to Zillow.
“Eventually mortgage rates will slow down home prices, but it hasn’t happened so far,” Ken Johnson, an economist at Florida Atlantic Univesity, said in a report last month. “We should not see rapid upticks in prices as mortgage rates rise. It’s that kind of exuberance that led to past housing downturns.”
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