DENVER — Rising interest rates are making it harder for Coloradans of many walks of life to buy a home, and one group is being hit particularly hard at the present moment: Veterans.
Interest rates for home loans through the Department of Veterans Affairs are the highest they’ve been in years, which is adding extra stress to veterans looking for a new home.
Denver7 spoke to Taylor Davis, a veteran of the United States Army, who is currently looking for a new home as he prepares to move from Colorado Springs to Grand Junction. Davis is moving as he accepts a job promotion he is excited about, complete with a raise in pay; however, he is learning the hard way that an increase in income does not necessarily lead to a increase in buying power in the current housing market.
“We’re understanding right now that even though I got into a new position, that came with an increase in pay, having to relocate into a new house means that I’m going to be bringing in less money than I was with my previous job at a lower salary,” Davis said.
Davis said it was the VA Home Loan program that enabled him to buy his current home in Colorado Springs, as it required no down payment and offered a very competitive interest rate at about 2.5%. His most recent quote, however, was at more than 8% as he looks for his new home on the Western Slope.
“We are going to have to downgrade our current standard of living with the house we’re living in right now to be able to relocate for work,” he said.
Interest rates on mortgages are up across the board, as the Federal Reserve has continued to hike rates since spring of 2022 to cool inflation. This has impacted the VA Home Loan program, created to put home ownership within reach for veterans after service, by making current loans too expensive for many looking to buy.
Marc Purvis, the vice president of Mortgage Lending for Guaranteed Rate Affinity, told Denver7 the program for years was the most affordable option for veterans. Now, he said, that is not necessarily the case.
“The interest rates went from the lowest point in history to now, you know, a point we haven’t seen in at least 20 to 25 years,” Purvis said. “So people are going to, you know, unfortunately wait in many circumstances.”
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Purvis recommends those looking to buy — veterans and non-veterans alike — to speak with a lending agent about all of the different options available to help realize their dreams of homeownership. He said rates could climb further as the Federal Reserve continues to watch inflation numbers.
For his part, Taylor Davis is among those waiting. He’s hoping to find the right home at the right price on the Western Slope, but he doesn’t know when that will be.
“It’s an emotional roller coaster that goes up and down just like the rates do,” he said.