Denver rent and mortgage costs called ‘unaffordable’

‘There are good reasons to rent temporarily, for example when moving to a new city, but from an affordability perspective, rents are insane right now.

Zillow estimated it takes 35 percent of a person’s monthly income to afford rent in Denver; the national average is 24.4 percent.

The study found it’s tough for renters as well.

A second quarter analysis shows renters are paying 28.7 percent of their monthly income on rent – more than a seven percent increase over past years. At the Modera Westshore in Tampa, tenants can pay up to $2,247 for a three-bedroom unit. According to Gudell, the answer lies with low mortgage rates.

Bonnie Davis, managing broker for ReMax Metro in St. Petersburg, agrees that Tampa Bay rents are “crazy”, not just for multifamily housing but also for single-family homes.

“It did have a pool but had not been significantly updated with any quality, and I thought there was no way (they’d) get $2,000 for that”, Davis said.

Denver is one of only five major metro areas where both rents and monthly mortgage payments now take a bigger bite out of incomes than they did in the years before the housing bubble, according to a new study from residential real estate website Zillow. High rents make it hard to save for a down payment, however.

Why do monthly mortgage payments cost so much less than rents these days? Renters paid 45 percent of their income in Miami, and 41 percent in the New York metro area. Additionally, while home values dropped steeply during the most recent recession and remain below their pre-recession peaks in most areas, rents have been on a slow, steady, upward climb for much of the past decade. From 1985 through 2000, home owners spent about 21.3% of their monthly income on mortgage payments.

A metro Denver buyer earning the median income purchasing the median-priced home with 20 percent down and borrowing the rest at current rates on a 30-year mortgage can expect the mortgage to eat up 21.1 percent of their pay.