Figuring out if renting or buying is the right move for your future can be confusing. Some sources of data show that buying a home is best, while others show that renting is actually the cheaper option. Check out our guide for a better understanding on renting versus buying in Colorado Springs.
Colorado Springs currently benefits from a red hot housing market that doesn’t show any signs of slowing down. With Denver’s metro area expanding in all directions, the Springs is swelling to support Colorado’s population boom. Home to universities, energy industries, agriculture, and a bustling downtown, Colorado Springs makes the perfect home for those exhausted with Denver’s expensive cost of living.
Current Housing Market
Colorado Springs is currently in a seller’s market with average home values skyrocketing over the past few years. In 2018 alone, home values saw an 8.8% increase from the previous year. Values are expected to climb into 2020, gaining another 5.5%.
It’s a great time to be a seller in Colorado Springs, but buyers may not fare quite as well. If you’re relocating to this booming city, consider the current market when deciding whether to rent or buy. During the winter months, homes tend to sit on the market for a bit longer than spring and summer months, which could tip the scales in favor of the buyer.
Current Rental Market
The rental outlook in Colorado Springs mirrors the real estate market. Rent prices begin to climb as spring and summer roll around, and once again dip down during the fall and winter months. The average price for a one bedroom is much lower than rental prices for other housing layouts — currently up to $900 less than its three- and four-bedroom counterparts.
Renting a one-bedroom apartment while you search for a house in Colorado Springs or while you wait for the market to cool off isn’t a bad idea if you don’t need to settle in right away. Rentals tend to be in short supply at the beginning of the year but become increasingly available yet more expensive as summer approaches.
Cost Difference Between Renting a Buying
Scour the internet and you’re sure to find conflicting information on whether or not renting is better than buying. Most people can agree that over the long term, buying is beneficial because homeowners build equity.
However, short-term residents of Colorado Springs may want to consider their future plans before purchasing a home. On the other hand, the market in this region doesn’t show any signs of slowing down so purchasing a home only to sell a few years later could net homeowners big gains.
Let’s say you purchase a house in the Springs for the average Trulia Median Sales Price of $289,225. We’re going to compare this to paying an average monthly rent of $1,500. Using this handy calculator, we find that you would need to remain in the house over four years in order to make buying the cheaper option. At year 6, you’d save an average of $21,000 a year.
The Colorado Housing and Financing Authority (CHFA) offers a variety of loans and down payment assistance grants for first time home buyers. Their down payment assistance grant offers up to 3% of your first mortgage and does not require repayment. That would be $8,676.75 towards your $289,225 house that you wouldn’t have to pay back, if you qualify.
U.S. Bank is one of Colorado residents’ best loved lenders. They offer in-person assistance at a variety of brick-and-mortar locations throughout Colorado Springs and its surrounding area. American Financing seeks to help would-be home buyers with poor credit scores while VA home loans are especially popular throughout the Springs as the metro area is home to both Army and Airforce bases.
Currently, 30-year fixed mortgage rates are at a year long low at 4.08%, compared to May 2018’s rate of 4.5%. However, just a few years prior, rates were under 4%. Nationwide predictions show rates are on the rise, meaning now would be a better time to buy than later.
Depending on your future plans, buying a house in Colorado Springs is a relatively safe bet. Just an hour north, Denver is continuously expanding, so businesses and residents will continue to look outward for cheaper real estate, cost of living, and less congestion.
Colorado Springs offers a perfect alternative to big city life with unparalleled mountain views and quick access to some of Colorado’s most treasured natural scenery. If your long term plans involve putting down roots in this bustling community, you would do well to connect with a local realtor and begin your property search.
Rent is expensive here, but not as expensive when compared to the city’s northern neighbors of Denver and Boulder, or western ski towns of Breckenridge and Vail. Mortgage and rent payments tend to even out so if you have the ability to put a significant down payment up, you will most likely come out on top when and if you go to sell.
Connect with a local Clever Partner Agent for a no-obligation consultation on your potential Colorado Springs home. Agents will utilize their expertise and area knowledge to recommend affordable neighborhoods, solid school districts, and advice on renting versus buying.