Home ownership has so many advantages. One of the bigger benefits is not having to worry about raising rents. Locking down your housing costs for the duration of your mortgage can give you a peace of mind that there will be no hikes in your monthly housing bill. So many renters are becoming home owners to avoid the rental trap.
Don’t Get Caught Up In The Rental Trap
Chief Economist at realtor.com,Jonathan Smoke, 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.”
The Joint Center for Housing Studies at Harvard University’s 2016 State of the Nation’s Housing Report, reported that “The number of cost-burdened households rose to 21.3 million”. Even more concerning, the amount of people paying over 50% of their income on housing leaped to a record 11.4 million. This makes it hard for households to save for a rainy day or pay other bills like food or 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
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 who believe that they need a large down payment may be holding themselves back from their dream home, unsure about leaving the rental trap. 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 so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Let’s get together to determine if you can qualify for a mortgage now!
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