Rent vs buy in Colorado
Of its 19 cities of 50,000+, 16 favor renting, 2 favor buying and 1 is a toss-up, on today's numbers over 7 years.
Renting or buying in Colorado's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Denver | Rent | renting wins by $37k | year 12 | $520,947 | $1,855 |
| Colorado Springs | Rent | renting wins by $17k | year 9 | $439,542 | $1,717 |
| Aurora | Rent | renting wins by $22k | year 10 | $447,833 | $1,742 |
| Arvada | Rent | renting wins by $47k | year 12 | $593,478 | $2,088 |
| Pueblo | Buy | buying wins by $5k | year 7 | $281,571 | $1,323 |
| Boulder | Rent | renting wins by $147k | year 21 | $937,901 | $2,435 |
Sources: Zillow Home Value and Observed Rent indexes. The verdicts come from our rent vs buy approach, which assumes a 20% down payment over 7 years.
Our view on Colorado
Colorado's high home prices make buying there tough for you. Across 7 years, buying wins in 2 of the state's 19 cities of 50,000+, and renting wins in 16. A typical home in Denver costs $520,947, and renting runs $1,855 a month. Over 7 years, renting comes out ahead by $37k. Break-even doesn't come until year 12. In Boulder, renting stays ahead by $147k until year 21, based on a home price of $937,901 and rent of $2,435.
Buying pays off for you only when the price tag is much smaller. Rent in Pueblo runs $1,323 a month, and a typical home there costs $281,571. There, buying comes out ahead by $5k and you reach break-even in year 7. Colorado Springs sits closer, with homes at $439,542 and rent of $1,717. Renting saves you $17k over 7 years, and buying catches up in year 9.
On a $529k typical home, state costs hit your budget in different ways. The property tax comes to 0.48%, well below the 0.94% US rate, while home prices grew 7.3% a year across the last 10 years. Even so, homeowners insurance runs you $1,856 a year, compared with $1,308 nationwide. In our figures, 34% of households rent, near the 35% US mark. The median rent comes to $1,761 a month, versus $1,413 across the country.
In Colorado, we'd pick renting, unless you buy in a cheaper city such as Pueblo or you'll stay past year 12. Choose renting and put the money you save into investments.