Renting Is Usually Better Than Buying in Denver Area, Study Finds, and Here's Why
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One of the hottest topics in the Denver area these days is high rent prices.
As evidence, we note that a recent post featuring eight reasons why Denver-area rents are so high has been among our most viewed in recent months.
But now, a new analysis from California-based RealtyTrac suggests that renting makes more sense than buying in many (but not most) places around the country.
And that includes three of five counties in the Denver-metro area.
This trend is hardly universal. RealtyTrac's Buy-to-Rent and Buy-or-Rent figures, based on data through May 2015 (see the complete methodology below), show that making monthly payments on a three-bedroom property are more affordable than paying fair-market rents on a similarly sized place in 188 of 285 counties analyzed across the country.
That breaks down to 66 percent.
Denver County, however, represents the smaller slice of the market.
Here's an excerpt from RealtyTrac's report:
Renting is more affordable than buying in 97 of the 285 counties analyzed (34 percent). Major counties where it is cheaper to rent than to buy include Los Angeles, California (69 percent of median household income needed to buy), San Diego, California (56 percent), Orange, California (57 percent), Riverside County, California in Inland Southern California (43 percent), King County, Washington in the Seattle metro area (45 percent), and Denver County, Colorado (51 percent).
“We are finding many first time homebuyers in a short-term-versus-long-term quandary along the Front Range in Colorado,” said Greg Smith, owner/broker at RE/MAX Alliance, covering the Denver market. “In today's market, many buyers are not willing to take the leap to increase their monthly payment to lock in the fixed payment of a mortgage. This tends to be a short-term perspective that can have a staggering long-term effect for a person’s net worth. When you consider rents are increasing at historically high rates of over 13 percent in many areas it makes a lot of sense to lock in a monthly payment with a mortgage.”
Of course, Denver County is only part of the Denver-metro area — and while the metric that suggests renting makes more sense than buying wins the day in a couple nearby counties as well, the script is flipped in two others.Next Page
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