How much do you need to make to live in Castle Rock?

With the median home sales price sitting around $650,000 in Castle Rock, what does that look like from an affordability standpoint?

A $650,000 home with 20% down, which would be $130,000 down, or a loan amount of $520,000, factoring in taxes and insurance, with an interest rate of 6.5% puts you at roughly $3,810 per month.

If you budget for your mortgage being 1/3 of your total income, before taxes, you would need to make $11,430 per month or $137,160 per year to have a comfortable mortgage at the median sales price in Castle Rock.

If you want your mortgage to be 1/4 of your total income, before taxes, that annual income number jumps to $182,880.

Are new homes in Castle Rock expensive?

New homes are being built in several different communities in and around Castle Rock.

I am personally a big fan of newly built homes. My wife and I just built a home with Toll Brothers here in Castle Rock and had a great experience. Be sure to see my other article on lessons learned in that process.

So, are new homes expensive in Castle Rock? Let's take a look.

On average, in 2024, new home sales are around the $800,000 price point.

An $800,000 home with 20% down, an interest rate of 6.5%, and including taxes and insurance, puts you around $4,700 per month. If we use the same budgeting factor of your mortgage being 1/3 of your income before taxes you would need a household income of $14,100 per month or $169,200 per year to afford this kind of home.

What if I don’t have 20% down?

You don’t need 20% down to purchase a home, but it significantly reduces your monthly payment if you do.

Lets say you have just 5% to put down on a home. An $800,000 home at 5% down, including taxes and insurance, jumps the monthly payment to $5,950 per month, as compared to $4,700 per month with 20% down. Its important to know that the $5,950 per month number is also including nearly $500 per month in Private Mortgage Insurance (PMI) which is required if you’re using a conventional loan with less than 20% down. This fee is tacked on by lenders to reduce their risk if you default on paying back your mortgage. Unfair, I know, but if they’re the ones with the money they tend to make the rules.

How much do you need to make to own a home in Castle Rock over $1,000,000?

Nearly half of the new homes for sale in Castle Rock are priced over $1,000,000.

With most of these new homes around the $1,200,000 mark, lets take a look at what that equates to monthly and yearly.

A $1,200,000 home with 20% down, a rate of 6.5%, and including taxes and insurance weighs in at $7,085 per month.

If you budget for your mortgage being 1/3 of your income you would need to earn $255,000 per year as a household to hit this ratio.

Its also important to note that the conforming loan limit in Douglas county in 2024 is $816,500. So, if you are purchasing a home where the loan amount exceeds this, you may be subject to a Jumbo Loan which could have higher interest rates. An example of this would be a $1,100,000 home with 20% down. The purchase price is $1,100,000 but the loan amount after 20% down is $880,000.

All mortgage lenders are different so it’s important to shop around and find a lender with good rates and low fees. Need help deciphering all this? Contact me at janderson@solidoakre.com and we can set up a call.

So, is Castle Rock Expensive?

Yes, Castle Rock tends to be more expensive than other areas but that doesn't mean its always more expensive. There are still plenty of options for first-time home buyers, and plenty of options for affordable houses and townhomes in wonderful neighborhoods. If you’re looking to upgrade to a larger home, a forever home, or build a new home, Castle Rock should be high on your list to check out.