It's no secret that saving to buy a house right now in Colorado is difficult, but it's not impossible.
"It's a significant challenge to save for a new house, and that cannot be understated," Bruce Allen, president of Bruce G. Allen Investments LLC, said.
He said, it's important to understand how and why the housing market got to this point.
First, the price of homes has increased more than 40% in Denver over the last five years, according to Case Shiller. On Oct. 31, 2019, the average cost of a home was $223,231. By Oct. 31, 2024 the average cost of a home was $316,160.
Mortgage rates have also gone up. Last week, the average 30-year mortgage rate rose to 7.04%, which is the highest in eight months. Allen said that "makes the cost of your monthly payments significantly more expensive on a more expensive house."
Allen said, one of the best ways to save for a house right now is through short-term deposits like money market funds or bank Certificate of Deposits (CDs).
"Those interest rates have also risen from very low, almost zero to over 4%" Allen said. "And so that's the positive. As people are saving, at least they're earning some money on that savings, while they gradually build up that down payment for the first house."
One of the best ways to figure out how much you can save is to create a budget. You can read tips on how to do so in last week's Money Saving Monday here.
Denver7 is committed to making a difference in our community by standing up for what's right, listening, lending a helping hand and following through on promises. See that work in action, in the videos above.