Mile High Home Group – Welcome to Denver

This guide is part of our complete Denver Real Estate Guide → [Denver Real Estate Guide]

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Figuring out how much house you can afford in Denver today is less about chasing a bank’s maximum and more about building a budget that survives rising insurance, property taxes, and a $575,000–$599,000 market. Median prices for detached homes in the city sit in the mid‑$600,000s and attached homes around $390,000–$400,000, while mortgage rates near 6–7% and a median down payment around 15% mean monthly costs can escalate quickly if you are not disciplined. A realistic affordability target anchors your purchase price to your lifestyle, commute, and long‑term plans, not the highest number on your pre‑approval letter.​

The framework below walks through how to calculate what you can comfortably afford in Denver’s current market, with examples grounded in city‑level data.

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Start With Denver’s Current Home Prices

Understanding price levels is the starting point for any affordability discussion.

• Recent reports place the overall median home price in metro Denver around $599,000, with detached homes averaging $650,000–$666,000 and condos/townhomes around $390,000–$400,000.​
• City data and brokerage analyses show home prices down roughly 2–5% year over year, with the median sale price around $573,000 in late 2025 and typical days on market in the low‑40s.​

Why this matters: if you are targeting “average,” you are talking about a roughly $575,000–$625,000 purchase, not a $400,000 starter, and that gap translates directly into several hundred dollars a month.​

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Understand How Lenders View Affordability

Debt‑to‑income ratios set your upper limit

Most lenders will approve you as long as:

• Your front‑end ratio (housing only) stays around 28–31% of gross monthly income.
• Your back‑end ratio (housing plus other debts) stays under 40–45%.

In Denver, these ratios collide with local realities: higher insurance and taxes plus possible HOA fees.​

If your household income is $150,000:

• Gross monthly income ≈ $12,500.
• 30% of gross = $3,750 for total housing (principal, interest, taxes, insurance, and HOA).

A lender might stretch you to $4,500/month or more, but that leaves less room for Colorado‑specific costs like higher auto insurance, variable Xcel bills, and the occasional hail‑related deductible.

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Factor In Denver Property Taxes and Insurance

Property tax math in Denver

Colorado uses an assessment rate and mill levy structure, which keeps Denver’s effective property tax relatively modest compared with other large cities.

• Residential property is assessed at 6.25–6.95% of market value, depending on the tax year and jurisdiction.​
• Denver’s combined mill levy for recent years has been in the 72–79 mills range, or roughly 0.072–0.079 as a rate.​

Using a simplified example:

• $600,000 home × 6.95% assessment ≈ $41,700 assessed value.​
• $41,700 × 0.072–0.079 ≈ $3,000–$3,300 per year in property tax, or about $250–$275 per month.​

Why this matters: taxes are not the largest cost line item in Denver, but they are significant enough that pushing the purchase price up by $100,000–$150,000 has a visible, permanent impact on your monthly payment.

Insurance in a hail‑prone market

Colorado’s severe weather has pushed homeowners insurance premiums higher in recent years, especially along the Front Range.​

• Many Denver owners now see $2,000–$3,000+ per year in homeowners insurance, depending on roof age, coverage, and deductible.​
• Policies with high wind/hail deductibles can reduce premium but increase your out‑of‑pocket risk if a storm hits.

When you estimate affordability, assume $175–$250/month for insurance on a typical single‑family home and adjust based on property type and coverage.

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Bring Mortgage Rates and Down Payment Into Focus

Current rate environment

Analysts expect Denver‑area mortgage rates to hover roughly in the 6–7% range, with some forecasts calling for modest easing toward the mid‑6s. This level is far above 2020–2021 lows and has a direct effect on your maximum comfortable price.​

Typical down payments in Denver

Buyers here are putting substantial cash into their purchases:

• Redfin data show the median down payment in Denver around $84,000, roughly 15% of purchase price, and climbing.​

That means:

• On a $500,000 home, 15% down ≈ $75,000.
• On a $650,000 home, 15% down ≈ $97,500.

Why this matters: your down payment does two things—controls your monthly payment and determines whether you carry private mortgage insurance (PMI). In a high‑price market, it is often better to buy slightly below your maximum and keep more cash in reserve for repairs and volatility.

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Translate Income Into a Denver Price Range

To keep this practical, consider three simplified scenarios using local price bands and typical payment ranges.

External payment benchmarks for Denver show:

• A 20% down payment on a $450,000–$550,000 home often leads to mortgage payments in the $3,200–$4,000/month range (principal and interest only), before taxes and insurance.​
• A 20% down payment on a $600,000–$700,000 home can push principal and interest into the $4,200–$5,100/month range.​

Adding realistic Denver taxes and insurance often increases those totals by $400–$600/month, and HOAs can add another $250–$500/month for many condos and townhomes.​

Approximate affordability table

These are illustrative—your numbers will vary with rate, down payment, and debts—but they show how quickly costs scale.

Household income (approx.)	Comfortable PITI target (30% of gross)	Typical price band that fits (15–20% down)	What that buys inside Denver
$120,000	~$3,000/month	~$425,000–$500,000	Smaller condo/townhome in central or near‑central neighborhoods
$150,000	~$3,750/month	~$500,000–$575,000	Mid‑range condo/townhome or modest single‑family in less‑premium pockets
$200,000	~$5,000/month	~$650,000–$750,000	Larger single‑family or updated home in stronger neighborhoods

These bands assume rates in the mid‑6s, standard Denver taxes, and typical insurance; stretching beyond them forces you into higher front‑end ratios or thinner reserves.​

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Don’t Ignore HOA Fees, Utilities, and Commute Costs

HOAs and shared buildings

In Denver, attached homes often carry higher combined costs than their listing price suggests because of HOA dues and insurance allocations:

• Many condo and townhome communities charge $250–$500/month in dues, sometimes more in amenity‑heavy central buildings.​
• Special assessments for roofs, garages, or elevators can create sudden one‑time costs.

This is why a $450,000 condo with a $450/month HOA can be less affordable than a $500,000 small house with no HOA—even if the purchase price is lower.

Utilities and energy performance

Older homes in Denver, especially early‑ and mid‑20th‑century stock, may have weaker insulation and older windows, which increases heating and cooling costs.​

• Budget $250–$400/month for gas, electric, and water/sewer, depending on house size and efficiency.​
• Newer infill can lower utility bills but may come with higher HOAs that offset those savings.

Commute and transportation

Even if your employer allows hybrid work, commuting along I‑25 or I‑70 at peak hours has real costs:

• Fuel and maintenance from longer commutes
• Time that could be used for work, family, or a second income stream

A home that keeps you close to your primary job corridors—downtown, DTC, or hospitals—often retains value better and feels more “affordable” over time than a cheaper house that adds 45 minutes each way.

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Stress‑Test Your Budget for Denver’s Volatility

A house that is barely affordable on paper can become a problem when anything shifts.

When you model affordability, build in:

• A 1–2 percentage point rate increase in case you need to move or refinance in a less favorable environment.​
• A $2,500–$3,000 annual property tax increase over several years due to rising valuations or mill levy adjustments.​
• At least 3–6 months of total expenses in cash reserves for job changes, hail claims, or unexpected repairs.

If your finances only work when taxes, insurance, and rates all move in your favor, you are looking at too much house for Denver’s current risk profile.

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How to Convert This Analysis Into a Purchase Target

Putting it all together, a thoughtful process looks like this:

1. Set your monthly comfort number, not the bank’s maximum—ideally 5–10% below what your lender will allow.
2. Back into a price range using realistic Denver taxes, insurance, and any likely HOA fees.
3. Layer in down payment: target 15–20% if possible, knowing Denver’s median down payment is around 15%.​
4. Check it against current market bands so you understand what product type (condo, townhome, single‑family) is realistic at that level.​
5. Stress‑test for higher rates and higher taxes and see if the numbers still work.

When those pieces align, you are not just buying “as much house as you can afford”—you are purchasing a property that can survive market cycles and Colorado’s cost structure without constantly stretching your household.

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Conclusion: Affordability Is a Strategy, Not a Number

In today’s Denver market, the question is less “What will a lender approve?” and more “What level of housing cost leaves room for taxes, insurance, weather, and life to happen without destabilizing everything else?” With median prices near $600,000, property taxes in the $2,500–$3,500/year range for many homes, and mortgage rates around the mid‑6s, a disciplined approach to affordability is essential for long‑term stability and upside.​

If you want a precise, data‑driven assessment of how much house you can afford in Denver city limits—based on your income, down payment, debts, and target neighborhoods—reach out for a private affordability consultation. Together we can build a clear number, a realistic price range, and a strategy that fits both today’s market and your long‑term Colorado real estate goals.