In Denver’s tough housing market, HUD asks youth not to give up on home buying

Metropolitan University of Denver’s Wednesday welcome-back-to-campus fair featured food trucks, recruiting student clubs and a visit from the feds.

The U.S. Department of Housing and Urban Development’s (HUD) Rocky Mountain Regional Office’s booth stood among rows of college-related resources, beckoning students and staff preparing for their first week back classes to learn about homeownership possibilities and debunk myths around the home buying process, said Dominique Jackson, HUD Rocky Mountain’s regional administrator.

“We’re here to help students and faculty see that homeownership is more accessible than they might imagine,” Jackson said. “People think they have to have boatloads of money, that they have to put down a ton for down payments, that they have to have absolutely perfect credit and that they can’t qualify for a loan, and that’s just not true. There are so many resources to help you.”

These HUD events, titled “House Parties,” aimed at young adults and communities of color are happening across the country, but Jackson noted their education efforts are critical in Colorado when examining Denver and the surrounding area’s housing market.

“We all know that housing costs are continuing to rise,” Jackson said.

HUD housing counselors met with passing students on the most diverse four-year institution of higher education in Colorado, teaching them about federal housing resources including Federal Housing Administration (FHA) loans. An FHA loan is a mortgage insured by the federal government and issued by a bank or lender approved by HUD. The loans often require a lower down payment than conventional loans and sometimes allow for the buyer to have a lower credit score.

However, HUD data found the FHA single-family home market in Denver is declining, with fewer homes being approved and a higher median sales price. In 2022, FHA approved 24,014 homes in Colorado and 14,073 in the Denver metro, a decrease of 33% and 36%, respectively, from 2021, according to the data.

The median price of an FHA-insured property in Denver has risen from $383,668 to $505,807 in the past five years.

The average monthly income of FHA homebuyers in Colorado was $9,096 and the average interest rate was 6.04%. In Denver, the average income was $10,109 with a 5.98% average interest rate.

“I think a lot of young people feel disheartened and discouraged,” said Denver Housing Authority’s Charlotte O’Donnell, who manned the DHA booth next to HUD’s at the college fair. “In all my years, I’ve never seen so many young people not have opportunities to enter the housing market. But what I try to tell people is maybe it’s not attainable today or six months from now, but to help them prepare and stick on the right path because things change in the market and it might be attainable soon.”

O’Donnell tells young people who want to set themselves up for homebuying success that they need stable employment with stable income that’s going to increase over time, a credit score of at least around 660 and to build savings.

Santiago Gutierrez, 21, stopped by HUD and DHA’s booth with “for sale” signs in his eyes. The MSU Denver real estate student plans to graduate in January and become a real estate agent, but he’s got his heart set on buying property of his own.

The born-and-raised Denverite acknowledged the local housing market is “unbelievably expensive” but said he doesn’t feel shut out by it. He said he knows there are local and federal resources available to help him buy the duplex of his dreams that he hopes to partially rent out to make some income. In the meantime, the budding real estate agent is saving money living with his parents while he attends school.

“There are a lot of opportunities,” Gutierrez said. “You just have to find them, so this booth was helpful in pointing me in some different directions.”

HUD’s Jackson said Wednesday’s event wasn’t just to check a box but to get results. If young people aren’t buying property, she said, they aren’t building intergenerational wealth, particularly in low-income and communities of color.

“That’s the risk for everyone,” Jackson said.

Cristal Ramirez, 27, dropped by the HUD booth asking what steps she needs to take before she dips her toe in the housing market.

The MSU Denver cybersecurity student who was born in Greeley said it would mean the world to her to be able to buy a home and move her mother in to take care of her.

“Growing up here, I’ve seen the market progress, and I would feel so lucky if I was able to own my own home in Colorado,” Ramirez said. “I feel excited to learn more about it, but it can feel overwhelming.”

Ramirez said she learned about working on her credit score and plans to investigate the pamphlets HUD gave her including information on HUD-approved housing counseling which the federal department said helps more than a million households annually.

More information on the housing counseling — ranging from free to low-cost sessions covering budgeting, loan options, down payment assistance programs and beyond —  can be found at hud.gov/housingcounseling.

“This is so important as people start planning their futures,” Jackson said. “I used a housing counselor to buy my first house, and people always say they wished they knew about these resources earlier.”