DENVER (KDVR) — The estimated monthly payment for a mid-priced Denver-area home is nearly twice as high as it was just three years ago.
This week, the average long-term U.S. mortgage rate climbed to its highest level in more than 20 years, pressuring an already tight Denver-area market dealing with low supply and sky-high prices.
Mortgage buyer Freddie Mac said Thursday the average rate on the benchmark 30-year home loan rose to 7.09% from 6.96% last week. Rates haven’t been that high since 2002.
Around Denver, that means hundreds and even thousands of dollars of difference in monthly mortgage payments.
Denver-area homes sold for a median price of $625,000 in July 2023. Assuming a 20% down payment on a 30-year fixed-rate mortgage and average insurance and closing costs, a monthly mortgage payment would be $3,833, according to Bankrate’s payment estimator.
In the same week in 2020, the same home would cost $2,574 a month in payments — a difference of $1,259.
Homebuyers got far more bang for their buck in 2020 when interest rates were at record lows.
In 2020, Denver homes hadn’t yet erupted into their current record price ranges. The median price for a metro home was $486,500. At the 2.96% interest rate in August 2020, the mortgage payment on a mid-price Denver home would have been $2,018 — nearly half the payment for current mid-priced homes at current interest rates.