Rent vs. Buy? It’s a question considered by thousands of people each day. However, only one decision provides the opportunity to build wealth and financial security. Here’s why more millennials are opting to buy instead of rent in Denver.
Millennials have often been stereotyped as a generation of renters but the latest data shows otherwise.
A survey by the National Association of Realtors that millennials have shifted towards purchasing homes. As a matter of fact, both older and younger sectors of the millennial generation jointly account for 37 percent of home buyers today.
Denver continues to be a popular U.S. city in which to live, according to a recent U.S. News and World Report survey. The survey rated the Mile High City #2 on the Best Places to Live in the U.S. Using criteria including strength of job market (i.e., unemployment rate and average salary), quality of life (crime rate, well being and quality of education and health care) and value index (annual housing cost and median annual household income), Denver ranked behind only Austin, Tex.
And it’s never been a better time to buy a home in Denver. Now that we are into the fall, home prices have been easing and buyers have more leverage with sellers. Furthermore, interest rates are below 4 percent, making this an excellent time to buy.
When Renting Does Makes Sense
When Buying Makes More Financial Sense
Renting an apartment in Denver is pricey. Latest figures from Rent Cafe indicate the average rent is $1,670 for an 841 square foot apartment. This represents a 4 percent increase over last year.
If a renter isn’t diligent about saving for a home, one of renting’s biggest benefits (lower monthly cost) becomes a moot point.
Buying a house, on the other hand, is both a way to establish financial freedom and invest in your future. Through your down payment and monthly mortgage payments, your money is no longer supporting a landlord but instead is enabling you to build equity over time and save for the future. Most homes appreciate over time which is why home ownership is one of the best investments you can make.
There are also significant tax breaks when you own a home. From deducting the interest from your mortgage payment to your property taxes, you will find benefits in owning your home opposed to renting. Also, you can save additional money when you work from home.
Finally, there are emotional benefits to being a home owner. Studies have shown that people who own their home are more connected to their community, are less stressed and their children perform better in school.
One Of America’s Hottest Real Estate Markets
According to Buildium, Denver is considered one of the 50 Up-and-Coming Markets in the U.S. When you consider the city’s high employment, income growth, cost of living and home sale growth, investing in real estate makes for a wise financial decision. The area continues to show growth year-over-year and there are still neighborhoods that show huge potential for first time home buyers.
In addition to homes generally appreciating over time, homeowners have an arsenal of tactics available to boost the value of their homes: re-painting, regular maintenance, landscaping, energy efficient upgrades, remodels, lighting and more. By making carefully thought out home improvements, your home can add value and comfort for years to come.
An Alluring Job Market for Millennials
Sure, Denver is famous for its hiking trails, Rocky Mountains, and ski areas but millennials are flocking to the city for its job market.
Thanks to job growth across industries like tech, finance, healthcare and hospitality, Denver has become an ideal urban center for young professionals. But what makes this area irresistible is the pay. Denver’s average annual salary of $57,400 is almost $7,000 more than the nationwide average.
Great outdoors, excellent job growth and better pay – what’s not to like!?
Denver’s booming job market and better wages aren’t just good for the economy, it also improves the quality of life of its residents.
The city’s unemployment rate sits well below the national average. Denver is Colorado’s most populous municipality with a population of 2,651,392 in the metro area; only 2.8 percent of Denver residents are unemployed. On the other hand, 3.7 percent of the entire US population are jobless.
Packed With Top Universities
Millennials who are interested in continuing their education have access to many fine institutions of higher education. In Denver, you’ll find the following four-year public and non-profit private universities: Metro State University, the University of Denver, Regis University, University of Colorado-Denver, Johnson & Wales and Colorado School of Mines (Golden). The University of Colorado-Boulder is 30 minutes northwest of Denver. In addition, there are many community and vocational colleges in the area.
In addition to furthering your education, living near these campuses also provides hours of enjoyment with opportunities to attend sports events, concerts, museums and cultural exhibits.
Now’s The Perfect Time To Buy A Home In Denver
We’ve looked at numerous reasons why millennials are moving to Denver.
For starters, buying a home is a proven and better wealth builder than renting.
More and more people have realized that Denver is one of the best places to shop for a home. There are impressive and steady gains in home value, an attractive job market, better-than-average wages and low unemployment.
And let’s not forget the things make Denver unique: its captivating backdrop of rocky peaks and wildlife, countless museums, bustling city life and more.
(Editor’s note: This blog was originally published in October of 2016. It has been updated and edited to provide current information).