There are many benefits to being a home owner. But one of the most beneficial is being able to protect yourself from the constant rising rent costs by locking in your housing payment for the life of your mortgage.
Don’t Become Trapped In the Rental Cycle
Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns that,
“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”
In the Joint Center for Housing Studies at Harvard University's 2016 State of the Nation’s Housing Report, they revealed that “The number of cost-burdened households rose to 21.3 million. Even more troubling, the number with severe burdens (paying more than 50% of income for housing) jumped to a record 11.4 million.” These households struggle to save for a rainy day and pay other bills, such as food and healthcare.
It’s Cheaper to Buy Than Rent
In Smoke’s article, he went on to say,
“Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”“While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”
Know Your Options
Perhaps you have already saved enough to buy your first home? If so, HousingWire reported that analysts at Nomura believe:
"It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)
Many first-time home buyers believe that they need a large down payment to buy their home, however this thought process may be holding them back from their dream home. In many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. With that being said, you may have already saved enough right now!
Bottom Line
The bottom line of this is don’t get caught in the trap that so many renters are currently falling in. If you are ready and willing to buy a home, find out today if you are able. We would be more than happy to help you in the mortgage and home buying process, and make it as effortless as possible.
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