It is that time of year that people start thinking about making positive changes in their life. Many New Year’s resolutions are forgotten about after several weeks or months…
If you are serious about making a positive change in your life, saying goodbye to renting in 2018 is a great place to start. Buying a home does not make sense for every person but the financial benefits cannot be denied!
Let’s consider the economic factors that make owning a home a part of the American Dream. Zillow recently said:
In reality, buying or renting a home is an intensely personal decision, with emotional and even financial considerations that go beyond whether to invest in this one (admittedly large) asset. Looking strictly at housing market numbers, there is a concrete point at which buying a home makes more financial sense than renting it.
There are many financial reasons that owning is better than renting!
Owning a home is a great way to build wealth. A recent study showed that a homeowner’s net worth is 44x greater than a renter.
If you had bought a home at the beginning in 2017, you could build more than $48,000 in wealth over the next five years. Check out this chart made using data from the most recent Home Price Expectation Survey:
This chart is made with the assumption that you bought a $250,000 home. Most people will either spend more or less but you should still be able to see how owning a home can help you to build wealth.
Buying a home can be less expensive than renting. While buying a home can be an emotional decision, the smart thing to do is look at buying a home as making an investment.
You must live somewhere so why not live inside an investment?
The latest Rent vs. Buy Report from Trulia reveals that owning a home is still less expensive renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. It is possible to buy a home in the Anderson SC area and pay less per month than you would have to pay in rent!
When you own, your monthly housing cost is fixed. Some people claim that when you rent, you do not have to pay the taxes or to maintain the property.
The costs the owner pays such as taxes or for repairs are ALWAYS passed onto the tenants!
Another reason to consider saying goodbye to renting in 2018 is saying goodbye to your roommates!
Did you know that Zillow recently reported that today, 30% of working-age adults live in doubled-up households. I know many people enjoy having a roommate and could easily afford living by themselves.
However, Zillow said the research shows that the increase in doubling up is driven by financial reasons. There is a strong relationship between doubling up and rental affordability.
While correlation is not causation, there is no doubt that rents are rising at a very fast pace. By owning, you can enjoy a stable fixed monthly housing cost.
Check out this chart showing how rents have been rising since 1988:
If you buy a home with a fixed rate mortgage, you do not have to worry about your monthly housing payment increasing each and every year!
There is no doubt that locking in your monthly housing payment is one of the best things about owning a home! Apartment List recently said:
Rents are up 2.7% year-over-year at the national level. Year-over-year growth continues to fall between the 2.1% rate from this time last year and the 3.4% growth rate from October 2015.
Despite the seasonal slowdown, rents are still up year-over-year in 89 of the 100 Largest cities.
Ouch! Rising rents can put a heavy burden on your monthly budget! In fact, the Urban Institute recently said:
Over a quarter of renters, or 11.1 million households, are severely cost burdened, spending at least half their income on rental housing.
It is very hard, if not impossible to get ahead in life if you are struggling to pay your rent and other bills every month. Plus knowing that you are facing rising rents can be pretty discouraging!
Life is for living not for struggling to pay your bills!
How to Say Goodbye to Renting in 2018
Owning a home can be better from a financial standpoint than renting. But with rising rents and home prices, it isn’t a simple decision.
Buying a home is a very serious financial decision. You must decide if you are ready for the financial responsibility.
Maybe you have already saved up enough to purchase your a house. A recent survey of about 24,000 renters discovered that 80% of millennial renters plan to buy a home but 33% are concerned about their credit ratings and 53% said having enough down payment is a problem.
Here are a few tips for getting ready financially to say goodbye to renting in 2018:
Part of owning a home is budgeting your money. By automating the way you save for your down payment, you are preparing yourself for how you must save money for home repairs, maintenance and upgrades.
Getting your credit score to a healthy level can save you thousands when you buy a home. Even if you are not buying a home, having a good credit score will save you money on many other things!
As I said before, you MUST be ready to live on a budget. This is why you must set a home buying budget that is very affordable. The last thing you want is to be house poor! Please read Learn How to Avoid Being House Poor
Today, homes are still very affordable due to the historically low mortgage rates. If you have any questions about buying a home in the Anderson SC area, please contact me!