How to Start Saving for a Home in Colorado’s Tough Market

In today’s Colorado housing market, saving for a home isn’t easy—but it’s far from impossible.

Bruce Allen, president of Bruce G. Allen Investments LLC, acknowledges the difficulty many first-time buyers are facing. “It’s a significant challenge to save for a new house, and that cannot be understated,” he said. But understanding how we got here is the first step to making a plan that works.

Over the past five years, home prices in the Denver area have jumped more than 40%, according to Case-Shiller data. On October 31, 2019, the average home price in Denver was $223,231. By the same date in 2024, it had climbed to $316,160—a sharp increase that’s made ownership harder to reach for many would-be buyers.

Adding to that pressure: rising mortgage rates. In January 2024, the average 30-year mortgage rate hit 7.04%, the highest it had been in eight months. That kind of rate hike significantly increases monthly payments, especially when paired with higher home prices.

So what can prospective buyers do to make real progress toward a down payment?

Allen suggests focusing on short-term, interest-bearing savings tools like money market funds or Certificates of Deposit (CDs) from banks. These accounts are offering far better returns than they did a few years ago. “Those interest rates have also risen from very low, almost zero, to over 4%,” Allen explained. “That’s the positive—at least now, your savings are actually earning something while you work toward your goal.”

His other key advice? Start with a budget. Mapping out your income, expenses, and savings goals is one of the most effective ways to figure out what’s possible—and where to cut back if needed.

While today’s housing landscape in Colorado may seem daunting, strategic planning and smart saving can still open the door to homeownership.