CarefulDont Get Caught In The Rental Trap

Dated: 04/11/2017

Views: 100

Careful…Don’t Get Caught in the Rental Trap!

Careful…Don’t Get Caught in the Rental Trap! | MyKCM

There are many benefits to homeownership. One of the top benefits is being able to protect yourself from rising rents by locking in your housing cost for the life of your mortgage.

Don’t Become Trapped 

Jonathan Smoke, Chief Economist at realtor.comreported 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. 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 homebuyers who believe that they need a large down payment may be holding themselves back from their dream home. 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!

Bottom Line

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!

Blog author image

Larry Gilman

I've been involved in the Real Estate business since 1994 and have helped over 1,200 families buy or sell a home, some I've done two and three times. I specialize in creative financing, home marketing....

Want to Advertise on this Site?

Latest Blog Posts

If You Are Thinking Of Selling You Must Act NOW

 If You Are Thinking of Selling? You Must Act NOW!If you thought about selling your house this year, now more than ever may be the time to do it! The inventory of homes for sale is well 

Read More

4 Reasons Why Fall Is A Great Time To Buy A Home

 4 Reasons Why Fall Is A Great Time to Buy A Home!Here are four great reasons to consider buying a home today instead of waiting.1. Prices Will Continue to RiseCoreLogic’s latest 

Read More

3 Myths About Todays Real Estate Market

 Top 3 Myths About Today’s Real Estate MarketThere are many conflicting headlines when it comes to describing today’s real estate market. Some are making comparisons to the market we

Read More

The Cost Of Waiting To Buy A Home

 The Cost of Waiting: Interest Rates Edition Some Highlights: Interest rates are projected to increase steadily heading into 2019. The higher your interest rate, the more money you

Read More