According to a study from NAR (National Association of Realtors), over the last five years rent prices have risen by 15%. The income for renters only went up by 11%. If you are currently renting, you can get caught in a never ending trap of not making enough to cover the price increases in rental payments. Therefore, it is harder to save for a down payment.
According to this study most renters give away 30% of their income for housing. Most home owners only give away 15% of their income towards housing. If you owned a home five years ago, you would have locked in your monthly housing expense while benefiting from wage increases. And at the same time paying down your mortgage and building your equity.
A lot of young buyers now are putting less than 5% down on a new home. It is now affordable to own a home. Especially while interest rates are now at historic lows. They will be rising soon. Once interest rates rise it can become even harder to get out of the renting trap.
If you can buy now, please don't wait! You should buy as soon as possible. If you want to buy in the near future, start working towards that goal now. Talk to a lender to see what you need to do to get approved for a mortgage loan.
If you are renting because you are not ready for the maintenance of a single family home, buy a townhouse or condo. You can get a really nice townhouse/condo for around $60k here in Atlanta. Your mortgage will be half of what you pay in rent now per month.
With rent prices steadily going up and income staying the same, becoming a home owner will soon be harder to obtain. Get out of the renters rat race and become a homeowner now.
Home Buyer's Guide Part 1
March 9, 2014
GA Dream Down Payment Assistance Program....Get $5,000-$7,500!!!