Ever since the housing crisis in 2008, homeowners and banks alike have been interested in finding the best cities for purchasing homes. A recent report found that Denver, Colorado is among “the most challenging” cities in the United States for first-time homebuyers.
Out of a list of 100 cities nationwide, Denver was ranked number one by Lending Tree, a home mortgage company. Surprisingly, Denver was able to outrank some of the largest cities in the country, such as Las Vegas, New York, San Francisco, and Austin.
Lending Tree, the mortgage company behind the report, compiled a host of relevant data in order to reach this list. Some of the criteria included the percentage of homebuyers with less than prime credit (lower than 680), percentage of the average down payment and the amount of homes sold that the family with median income can afford (according to the Housing Opportunity Index). The report also took into account relevant information from the Federal Housing Administration such as the share of buyers using this type of mortgage and the average down payment set as an average for all loans.
In the report, Lending Tree mentioned that “Denver is not the most challenging city in any single measure, having weak showings across the board, which could be (an) obstacle for first-time buyers. Down payments are high at $66,806, and even the FHA down payment is a considerable $22,841”. In the same report, Lending Tree ranked Little Rock, Arkansas as the best city for first time homebuyers.
To make matters worse, Denver was recently ranked in the number one spot in the nation (along with Seattle and San Francisco) for the least months supply of housing inventory at 1.1 months. In other words, Denver not only has high down payments, but the amount of homes up for sale is low as well. The Denver Metro Association of Realtors revealed that January was a record-low month with only 3,869 available listings for sale.