Rates are the highest they’ve been in years…
Homeownership rates are the lowest they have been in the last 50 years. A large portion of Americans is still renting properties, instead of enjoying a home of their own. Consumer reports believe this is an issue because of a buyer’s lack of trust in their ability to purchase. It is still a long-standing notion that a buyer needs 20% towards the cost of the home in order to move forward, but this isn’t true. With countless down payment assistance programs and closing cost roll-ins, a homeowner could move in with as little as a few hundred to a couple of thousand dollars. This makes a huge difference in the time it takes to save up to make the move.
With interest rates at an all-time low, home ownership in today’s market is a great investment. The money saved over a mortgage’s lifespan can result in tens of thousands of dollars, if not hundreds of thousands. That’s more money in your pocket today. Don’t wait to buy when interest rates soar again. With low-interest rates, that means your monthly mortgage payments are at a significantly lower cost as well. With such heated housing marketing, rental prices are soaring, and statistics are constantly showing that home ownership can be equivalent to your rental rate each month, if not less. Why get stuck in a small 2-bedroom apartment if you can move into a 3-bedroom house with a great backyard and pay a monthly rate that is the same?
There is also the fear that a home can keep you “stuck” or “rooted” in one place, without an easy transition out if you decide to move. Although the future of the housing market isn’t easily predictable from location to location, you can always discuss with your agent about buying a home in an area that has a strong turn-over rate when a home hits the market. The equity build-up when it comes time to sell is going to be far more beneficial than if you put money into a rental and decided to move. The money from selling the property can be used to purchase a new home. With renting, there would be no additional funds to transition into a new place.
Now imagine if you were renting a home for $2000/month. If your landlord is renting to make a profit, think how much less you’d be paying on a monthly basis towards your mortgage, if the home was yours. Then you wouldn’t be paying a landlord to profit off of you, you’d be paying a reasonable rate, and get to call the property your own. Discuss with your agent and lender the steps you need to take towards home ownership, and you just might be happily surprised about the type of home you can afford to move into.