According to ATTOM Data Solutions’ 2018 Rental Affordability Report, “buying a median-priced home is more affordable than renting a three-bedroom property in 240 of 447 [or 54% of] U.S. counties analyzed for the report.”
For the report, ATTOM Data Solutions compared recently released fair market rent data from the Department of Housing and Urban Development with reported income amounts from the Department of Labor and Statistics to determine the percentage of income that a family would have to spend on their monthly housing cost (rent or mortgage payments).
Daren Blomquist, Senior Vice President of ATTOM Data Solutions had this to say:
However, the report also shows that the average fair market rent rose faster than average weekly wages in 60% of the countiesanalyzed in the report (266 of 447 counties). With rents rising, many renters should consider buying a home soon.
Rents will continue to rise, and mortgage interest rates are still at historic lows. Before you sign or renew your next lease, meet with a local professional who can help you determine if you are able to buy a home of your own and lock in your monthly housing expense.
There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize, however, that unless you are living with someone rent-free, you are paying a mortgage – either yours or your landlord’s.
As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:
Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage as opposed to paying rent:
As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.
Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.22% last week.
Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.
Contact us to learn more about your local market! (708) 529-5839 cell.
There are many benefits to homeownership. One of the top benefits is protecting yourself from rising rents, by locking in your housing cost for the life of your mortgage.
Don’t Become Trapped
A recent article by Apartment List addressed rising rents by stating:
The article continues explaining that:
Additionally, the Urban Institute revealed that,
These households struggle to save for a rainy day and pay other bills, including groceries and healthcare.
It’s Cheaper to Buy Than Rent
As we have previously mentioned, the results of the latest Rent vs. Buy Report from Trulia shows that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
The updated numbers show that the range is an average of 6.5% less expensive in San Jose (CA), all the way up to 57% less expensive in Detroit (MI) and 37.4% nationwide!
Know Your Options
Perhaps you have already saved enough to buy your first home. A nationwide survey of about 24,000 renters found that 80% of millennial renters plan to eventually buy a house, but 72% cite affordability as their primary obstacle. Aside from affordability, one in three millennial renters have concerns about their credit scores, and another 53% said that a down payment is an obstacle.
Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream homes. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!
Don’t get caught in the trap that so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Contact us – or your bank – to help you determine if you are eligible for a mortgage.