Even mortgages have become too expensive for first-time Summit County buyers after interest rates have doubled, real estate demand has increased and inflation has occurred, according to local authorities.
If someone wants to buy a home and can’t afford it right, they can go to the lender, apply for a loan, and start a mortgage.
It allows people to pay off their home when they live in it, but there is still space for their families. However, Summit County lenders are aware that some first homebuyers can’t afford even the mortgages they would pay as a way to help them buy a new home.
Summit County lender Kevin Berkeley gave an example. Let’s say you have a couple who wants to get a $ 400,000 loan to their house. If the interest is 6%, the payment is $ 2400.
“But wait,” Berkeley said. “Membership fees are $ 400 a month. They’ll be added. Taxes, insurance and private mortgage insurance can easily be an additional $ 250. Now you’re up to $ 3,000,” he said.
Next, Berkeley probably added a $ 500 car payment. Therefore, the monthly debt repayment amount is $ 3,500. This doesn’t seem to be that bad, but Berkeley said it’s the income requirement for that kind of loan that almost everyone stumbles on.
There are three main requirements for applying for and receiving a loan: credit score, down payment and income.
“It’s always the one who breaks the deal,” Berkeley said. Because in order to get a loan, buyers have to double their debt payments. This means that to buy a virtual $ 3,500 mortgage, the buyer must earn at least $ 7,000 a month.
“For $ 84,000 a year, you’re even eligible for a $ 400,000 loan,” Berkeley said. He added that a quick search online wouldn’t give you a $ 400,000 home in Summit County.
According to the Land Title Guarantee Company’s Summit County Market Analysis, the average resale price for single-family homes in 2021 was $ 1.7 million, and the average resale price for similar homes from January to May 2022 was $ 2.15 million.
Therefore, Berkeley said that certificate-restricted homes are essential for first-time homebuyers. “Unless it’s a house with a $ 300,00-600,000 certificate limit, it’s very difficult for locals to make enough money to qualify,” he said.
Laurie Best, manager of the Town of Breckenridge Housing and Childcare Program, says he has been working on affordable housing in Breckenridge for over 20 years. And now, she said, it’s very difficult because of low inventory and high demand.
“Currently, it’s pushing this incredible real estate market up, and it’s not affordable for the majority of the local workforce,” she said.
Leah Canfield, a real estate broker in Summit County, said the best solution was to add more homes, but Summit County, unlike Denver, could have suburbs spread out over the plains. But she believes she can’t do much by law unless more homes are built.
“Like people in my industry, people in the city council, and first-time homebuyers, we are all very much in that the community wants to thrive and the locals stay. I really believe that I have similar goals, Canfield said, but she added, “There is disagreement about the best way to do that.”
Canfield believes that the best way to turn the tide is to create as much inventory as possible in the “affordable housing sector.” But with limited space, at some point Canfield should have a way to create affordable residential areas for people working in Summit County that never “never” go to second home owners. said.
Breckenridge is most often said to have worked to provide affordable housing to the Summit County labor force. In February, Brickenridge said, “We will make $ 50 million worth of public investment to create more than 950 units over the next five years.”
Mr Canfield said he never really sees the trend of this expensive real estate end, but hopes the market will soon change from a seller to a buyer’s market.
According to Canfield, the Great Recession 15 years ago was the last major real estate change, with a normal real estate cycle occurring every 7-9 years. She added that she sees a small win for buyers, but rarely sees it.
Still, as Breckenridge Housing Manager, Best says he sees every day a situation where locals have to decide whether to stay in Summit County or leave because they can’t afford it.
“Unfortunately, many of our locals have decided to go somewhere, just because of the housing challenges,” she said.