Do you realize that buying a home instead of renting is way less expensive? What’s more, home ownership creates substantial wealth and will skyrocket your net-worth as you gain equity.
Never in the history of this country was home ownership more affordable than NOW.
Here are the results of a National Study comparing the cost of renting versus buying. It found that tenants spend 29.5% of their income on rent, while homeowners only spend 15.3% of their income on mortgage payments.
That’s 48% LESS!
The gap between buying a home and renting has widened over the past 10 years. This is due to historically low interest rates and ever increasing apartment rents.
Why are Renters Not Buying?
The chart above shows a clear financial benefit of buying a home vs renting. So, you would assume that more renters try to get out of their lease and start looking for a home.
That is not the case. As a matter of fact fewer lease tenants have decided to make the switch in the past 15 years. In 2014 only 14% of renters entered the housing market, down from 20% in the early 2000’s. It’s one of the reasons why home sales dropped in the second half of 2014.
So, why do young families decide to rent instead of buy?
There are 2 main reasons:
A Glut of New Apartments
Columbus developers have been busy building modern, high-end apartments all over the City, especially in the suburbs. More apartment communities are planned for 2015 in Dublin, Worthington, Upper Arlington, and all over town.
Tough Mortgage Lending Standards
Since the Great Recession it has been hard to qualify for a home mortgage. Many young adults have decided to pay off student loans and save for a down payment instead of becoming home owners immediately.
The Coming Influx of New Buyers
A shift is coming. With apartment rents rising and lending requirements relaxing, more renters will want to own a home. In the not-so-distant future there will be an influx of new buyers competing for a shrinking inventory of homes for sale.
It is tough to find the right house in the current market.
It will get even more competitive when these renters decide to buy. Prices will continue to rise and interest rates will most likely go up later this year, too.
NOW is the best time to buy!
If you or someone you know are planning to buy or sell this year,
Please call me at (614) 975-9650 TODAY!