5 min read
How Much House Can I Afford in Colorado?
-
-
Copied link to Clipboard!
One of the biggest parts of a person’s budget is their housing expense. If you’re looking to purchase a home, read this article to learn more about how home affordability has changed and what you can do to make things more affordable and fit your budget.
LESSON CONTENTS
How has home affordability changed in Colorado?
Buying a home is an important life event in many people’s financial journey. There are many reasons to buy a home, including escaping the rising cost of rent, building equity or having a long-term place to raise a family.
Whatever the reason, it is important to find a home that you can afford so you can focus on other things in your life. However, in the past few years, rising home prices and Colorado mortgage rates have made it more difficult to find a home that fits your budget.
The median single-family home price in Colorado is reported to be $575,000 (year-to-date August 2022). This is a 13.9% increase from the same period last year.
On the other side of the equation, it has also become more expensive to borrow money for a home. According to Freddie Mac, the average mortgage rate for a 30-year fixed mortgage recently surpassed 6%, a figure we haven’t seen since 2008. Higher mortgage rates mean that you’ll pay more in interest on a monthly basis and over the life of the loan.
How much do homes cost in Colorado?
Below are some estimates on how much you’d need to make to afford a home in counties across Colorado’s front range1. These estimates are based on the following assumptions:
- 10% down payment.
- 6% interest rate.
- 30-year fixed mortgage.
The monthly payment is principal and interest and does not include property taxes, mortgage insurance, home insurance, homeowner association fees and other costs.
Gross household annual income is the amount your household would need to make per year, before taxes, to afford a home if you were keeping your monthly housing expense under 30%. Our financial coaches generally recommend keeping your housing expense between 25%-30% of your gross income.
Another common rule of thumb is the 28/36 rule. According to this rule, a household shouldn’t spend more than 28% of their gross income on their total housing expense and no more than 36% on total debt payments.
El Paso County
Median single-family sale price: $483,000 (+12.3% from last year)
Monthly payment: $2,607
Gross household annual income: $104,250
Denver County
Median single-family sale price: $700,000 (+11.1% from last year)
Monthly payment: $3,778
Gross household annual income: $151,087
Larimer County
Median single-family sale price: $590,000 (+18% from last year)
Monthly payment: $3,184
Gross household annual income: $127,320
Pueblo County
Median single-family sale price: $322,000 (+13% from last year)
Monthly payment: $1,738
Gross household annual income: $69,500
How much house can I afford?
For ADA accessible version, click here.
How can I make a home more affordable?
While the cost of homeownership may be increasing, here are some ways to make your future home more affordable.
Increase your down payment
Increasing your down payment is one of the simplest ways to reduce your monthly mortgage payment. Typically, home buyers will have to put at least 3.5% of the home price as a down payment.
Down payment assistance programs and loans that only require a small amount as a down payment can be a great way to get into a home if you don’t have a lot of cash savings. However, it’s also important to remember that there are other costs to consider.
If you make a smaller down payment, you’ll pay more in interest over the life of the mortgage and you may have to pay mortgage insurance, both of which can increase your monthly payment.
The larger your down payment, the less you have to have to borrow, which will reduce your monthly principal and interest payment. If you pay 20% or more for your down payment, you will also avoid having to pay mortgage insurance which will help lower your monthly payment as well.
If monthly mortgage payments are looking a little high for your current budget, consider holding off and saving for a larger down payment.
However, as you’re building your cash reserves, make sure that you’re also paying down your debt. Mortgage lenders will look at your debt-to-income (DTI) ratio to help determine your ability to manage your monthly payments when approving your mortgage application. Most lenders require your DTI ratio to be below 43%.
Improve your credit score
If you know you want to buy a house in the near future, one of the best things you can do is to improve your credit score. Mortgage lenders will consider your credit score and other factors when determining your interest rate.
By improving your credit score, you increase your chances of getting the best interest rate possible, which can save you a lot of money on your monthly mortgage payment and the total amount of interest you pay over time.
Consider an adjustable-rate mortgage (ARM)
If you’re calculating your mortgage payment and find out that the monthly payment with a 30-year fixed rate mortgage may be too high for your budget, another option to consider is an ARM.
These types of mortgages can come with a lower initial interest rate than a fixed rate mortgage, which can help make your payments more affordable for a time. Unlike their fixed-rate counterparts, these types of mortgages have interest rates that change or adjust at set intervals. Some of these rates are fixed for several years before the rate will begin to adjust.
While these types of mortgages can be great for having a lower initial rate, make sure that you can afford your mortgage payments once the initial rate-lock period is over. Lenders usually have a cap on how high the interest rates can be adjusted.
You also have the option to refinance if fixed interest rates are lower at the time your ARM is set to change. There are usually closing costs associated with refinancing, which are usually between 2%-6% of the loan amount.
Although rising home prices and interest rates can make finding your dream home more challenging, there are still strategies you can use to help fit the monthly payment in your budget. Use these tips and work with an experienced lender to help you find an affordable option for your future home.
Figures presented are current as of the date of publishing and are subject to change in the future.
1Figures are estimates and are for illustrative purposes only. Estimates should be used as a self-help tool only and do not consider the impact of fees that may apply. These figures may not be applicable to your individual situation and do not constitute an offer. We encourage you to seek advice and guidance from a qualified professional regarding all personal finance issues. Actual terms may differ.
Related Resources
View All
10 min read
How Do I Refinance My Mortgage and Consolidate Debt?
Paying different credit card bills, a personal loan, and a 30-year mortgage every month can feel like managing a dozen spinning plates at once. Refinancing your home loan to combine higher-rate balances into a single, lower-rate mortgage — known as a debt consolidation refinance — transforms that juggling act into one predictable payment.
How do you refinance your mortgage for debt consolidation? We break down how a mortgage debt consolidation refinance works, when the math favors you, and how to weigh the risks and rewards.
12 min read
What are the Differences: VA Loan vs Conventional Loan
Choosing the right credit union mortgage loan shouldn’t feel like decoding a secret manual. Yet when people first compare a VA loan vs a conventional loan, the jargon — funding fees, PMI, conforming limits — can stall the search before it starts. This guide strips away the haze by lining up the two products feature by feature. You will see how each loan handles down payments, credit scores, interest rates, and closing costs, and you’ll finish with a checklist that points you toward the option most likely to fit your budget, service record, and future plans.
5 min read
Why Are Mortgage Rates So High?
If you are mortgage shopping this year, you are feeling the rate sticker shock. The average 30-year fixed rate sits around 7 percent, more than double the record lows of 2021 (Mortgage News Daily, 2025). Why are mortgage rates so high today? In short, mortgage rates are higher because the bond market — where mortgage prices are set — adjusted the cost of money. This shift came after the Federal Reserve responded to a period of high inflation. A careful look at policy, prices, and growth helps explain the surge in rates and the impact of mortgage rates on housing in 2025 and beyond.
10 min read
Can You Purchase a Car with a Credit Card?
Ask any efficiency-minded car shopper, and the first question is usually: Can you buy a car with a credit card? In theory, the answer is yes — you absolutely can. In practice, the path is littered with card-issuer rules, dealer surcharges, and interest-rate landmines that can turn a clever rewards strategy into an expensive misstep. New-vehicle prices hit an average of $48,699 in April 2025, a 2.5% month-over-month increase (Cox Automotive, 2025). At the same time, Woolsey (2025) notes the median credit card APR climbed to 24.2% in March 2025. That combination of sticker shock and swipe costs makes it vital to understand every angle before you hand the finance manager a piece of plastic.
10 min read
A Comprehensive Guide to Credit Union Home Loans in Colorado
Buying a home is one of the most significant financial decisions you'll make in your lifetime. If you're considering purchasing a home in Colorado, one of the best options is to obtain a home loan through a credit union. Why is choosing a credit union for your home loan advantageous? Learn more below, including the types of home loans in Colorado available at credit unions, how to qualify, and the step-by-step process to get you into your dream home.
10 min read
How to Qualify for a Home Equity Line of Credit (HELOC)
Home values continue to soar, and U.S. households have accumulated over $35 trillion in home equity (St. Louis Fed, 2024). If you are among those who have done so, you can borrow against this financial resource for various needs, such as home improvements, education expenses, or consolidating high-interest debt. Below, we outline how to qualify for a Home Equity Line of Credit (HELOC) to prepare you for this opportunity.
12 min read
A Guide to the Different Types of Home Loans in Colorado
Purchasing a home is a dream for many. In this process, understanding the types of home loans in Colorado sets you on the right track to get a mortgage that suits you. Therefore, let's explore the various types of mortgage loans in Colorado and their benefits and eligibility requirements. You will also learn how Ent Credit Union can assist you in home-buying.
12 min read
Best Practices for Using a Home Loan Calculator in Colorado to Get Accurate Results
One of the most consequential financial decisions you will make in your lifetime is purchasing your home. In Colorado's unique housing market, using a home loan calculator in Colorado can provide invaluable insights. Read on for effective best practices in using these calculators to get accurate results.
12 min read
Taking On Your First Home Mortgage? Here's Our First-Time Homebuyer’s Guide to Home Loans
The journey to homeownership is exciting, especially for first-time buyers. However, the complexities of mortgages, understanding rates, and knowing what steps to take can sometimes become overwhelming. This guide demystifies the process of securing your first home mortgage.
8 min read
Buying a Car for the First Time
Starting your financial journey is like setting off on an exciting road trip. You’re gearing up for major life events, like buying a car for the first time. In planning for this event, remember that you are making decisions that should benefit you in the long run. Therefore, it’s important to understand the processes and the appropriate financial products to achieve your goal. This guide shows the critical steps of purchasing your first car.
7 min read
Choose the Right Mortgage Refinance Plan
Is refinancing the right move for me? It depends. Refinancing your mortgage loan can be a strategic financial move, saving you money on interest, lowering your monthly payments or shortening your term.
12 min read
Documents for Refinancing a Mortgage: A Comprehensive Guide
Refinancing a mortgage offers a pathway to adjust your financial burdens by changing the terms of your home loan in Colorado. There are several reasons for refinancing (Freddie Mac, 2024), including lowering your interest rate, reducing your monthly payment or changing the mortgage term. Other common reasons include switching from an adjustable rate to a fixed rate or tapping into your home equity. However, the process involves gathering and submitting several refinance documents. Here’s a guide to help you understand what you'll need to provide to refinance your mortgage.