Avoid Being Caught In The Renters Trap

Dated: 09/22/2015

Views: 216

Don't Get Caught In The Renter's Trap | Keeping Current Matters

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

The National Association of Realtors (NAR) released their findings of a study in which they studied “income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years in metropolitan statistical areas throughout the US.”

Don’t Become Trapped

The study revealed that over the last five years a typical rent rose 15% while the income of renters grew by only 11%. If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment.

The average renter in the United States pays 30% of their income on housing compared to that of a homeowner who can expect to spend 15%.

In many metro areas the percentage of income spent on housing is even higher and continues to rise every year. Like in San Francisco, CA, where the average renter spends 59% of their monthly income on housing or nearly 65% in Boston, MA.

Homebuyers who purchased their home over the same five-year period locked in their housing costs and were able to grow their net worth as home values have increased and their mortgage balances have gone down.

Know Your Options

Perhaps, you have already saved enough to buy your first home. HousingWire reportedthat 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)

As we have reported last week, over 60% of Millennials who recently bought a home put down less than 20%; 36% put down less than 5%. Your dream home may be more attainable than you ever imagined!

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. Have a professional help you determine if you are eligible to get a mortgage.

Blog author image

Lisa Birdsong

Top 1% of Texas Real Estate Teams; McSam Realtor of the Year, 2016; Certified Residential Specialist, CRS D Best Realtor, 2016, 2017 Castle Hills Realtor Advisory Board, 2016; Windsong Ranch Real....

Latest Blog Posts

How To Buy A Home With Zero Money Down

No down payment? We have a list of homes in Dallas-Fort Worth area that qualify for 100% financing through USDA program. The criteria is specific, but we have lenders to help you determine

Read More

Lease To Own The Home Of Your Choice

The path to home ownership is easier than you think. There are numerous loans available to assist you, but if those don't meet your needs then we have another option for you. And it's affordable.The

Read More

Housing Starts Tumble In July

Homebuilding in the U.S. took a downward turn in July as housing starts declined 4.8 percent, falling short of analyst expectations, the Commerce Department said on Wednesday. Year-over year,

Read More

506 Connemara Celina TX For Sale

POOL HOME ON SPECTACULAR CUL-DE-SAC LOT BACKING TO GREENBELT & CREEK!  See more pictures and information here:  https://goo.gl/ghcf6h Offered exclusively by Lisa Birdsong Group |

Read More