Covid is causing people to leave congested city life and to move to the suburbs with more space to socially distance and to work from home, and greater affordability. And now homebuyers have the lowest mortgage rates ever recorded as rates have dipped below 3% for many homebuyers. Instead of paying rent of over $2000 a month for a 2 bedroom apartment they can now buy a $400k home in the burbs.
And with rates at 3% or lower it's now CHEAPER TO BUY THAN TO RENT in many instances. A $400k home now rents for at least $2200 a month here in south metro Denver. But, with 5% down and great credit you could buy this home for roughly $2,000 a month which includes P&I, taxes, homeowners' insurance and PMI.
And as I reviewed the June RE stats in more detail people who own an entry-level SFR priced < $450k may have the best opportunity in their lifetime to buy their long-term home. Why? Demand for their homes is SOARING and I won't be surprised to see home prices start rising by at least 8% year over year for these homes as these homes are involved in Bidding Wars nearly all the time. Then, they can buy a new home priced at $550k to $600k and get a $500k mortgage and their principal and interest payment would only be $2075. Tamara and I have for many years wanted to buy a vacation home in Estes Park and we are now doing it. Why? Interest rates below 3% makes this goal possible for us. We are taking advantage of this once in a life-time opportunity to buy a vacation home.