Priced out: Summit County lenders say even loans are becoming unaffordable for locals |

Priced out: Summit County lenders say even loans are becoming unaffordable for locals

After doubled interest rates, increased real estate demand and inflation, even house loans are now becoming too expensive for first-time buyers in Summit County, according to local officials. 

When someone wants to buy a house and they maybe can’t afford it out right, they can go to a lender, apply for a loan and start a mortgage.

That allows people to pay off the house as they live in it but still have a space for a family. However, lenders in Summit County are finding that some first-home buyers can’t even afford the mortgage they would be paying as a way to help them buy their new house.

Kevin Berkley, a lender in Summit County, gave an example: say there’s a couple that’s hoping to get a $400,000 loan on a house. If interest is 6%, your payment is $2400. 

“But wait,” Berkeley said, “dues are $400 a month. Those get added in. Taxes, insurance and private mortgage insurance would easily be another $250. Now you’re up to $3,000,” he said.  

Then, Berkeley added on a probable $500 car payment. So the debt payments every month are $3,500. This doesn’t seem so bad, but Berkley said what trips almost everybody up is the income requirements for that kind of loan. 

To apply and receive a loan, there are three main requirements: credit score, a down payment and income.

“That’s the one that’s always the dealbreaker,” Berkley said because in order to get a loan, the buyer must make double their debt payment. Meaning, to afford the hypothetical $3,500 mortgage, the buyer would have to be making at least $7,000 a month. 

“$84,000 a year to even qualify for a $400,000 loan,” Berkley said. He added that even a quick online search would barely yield a single $400,000 home in Summit County. 

According to the Land Title Guarantee Company’s Summit County Market Analysis, the average resale price for a single-family home for the whole year of 2021 was $1.7 million, and the average resale price for the same kind of home from January to May of 2022 was $2.15 million. 

That’s why, Berkeley said, deed-restricted housing is integral for first-time home buyers. “Unless it’s a deed restricted home at 300,00-600,000 dollars, it’s very difficult for a local to make enough money to qualify,” he said. 

Laurie Best, manager for Town of Breckenridge Housing and Childcare Program, said she has been working on affordable housing in Breckenridge for over 20 years. And right now, she said, has been extremely challenging because of low inventory and high demand.

“It is driving up this incredible real estate market right now where the prices are unaffordable to the majority of our local workforce,” she said.

Leah Canfield, a real estate broker in Summit County, said even though the best solution is to add more homes, Summit County is not like Denver — where suburbs can sprawl into the plains. But unless more houses are built, she believes there is only so much legislation can do.

“I truly believe that people in my industry, as much as people on town council, as much as first time home buyers, I think we all have very similar goals in that we want to see the community thrive and we want to see locals stay here, Canfield said. However, she added, “There is a disagreement on the best way to do that.”

Canfield believes the best way to change the tide is to create as much inventory as possible in the “affordable housing realm.” But with the limited space, at some point, Canfield said there should be a way to create affordable areas of housing for people who work in Summit County that will “never” go to second home owners. 

Best said Breckenridge has been working to supply affordable housing for Summit County’s workforce. In February, she said, Breckenridge committed “$50 million worth of public investment to create over 950 units over the next 5 years.” 

Even though Canfield said she never really sees this trend of expensive real estate ending, she does hope that soon the market will turn from a seller, to a buyer market.

According to Canfield, 15 years ago during the Great Recession was the last big real estate change, and normal real estate cycles happen every seven to nine years. She added that she is seeing some small victories for buyers, but very rarely.

Even then, as the Breckenridge Housing Manager, Best says she sees situations every day where locals have to decide whether to stay in Summit County or leave because they can’t afford it.

“Unfortunately, so many of our locals are making the decision to go somewhere else. Just because of the challenges around housing,” she said.

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