Don't get caught in the rental trap!

Posted by Andreas Holder on Monday, August 29th, 2016 at 11:03am.

We all know about the many benefits of home ownership. One of the top reasons to own is protect yourself from rising rents and lock in your housing expenses for the life of your mortgage, typically 30 years. 

Don't become trapped!

Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a "Rental Affordability Crisis." He warns that,

"Low rental vacancies and lack of new rental construction are pushing up rents, and we expect that they'll outpace home appreciation in the year ahead."

In the Joint Center for Housing Studies at Harvard University's 2015 report on Rental Housing, they reported that 49% of rental households are cost-burdened, meaning they spend more than 30% of their income on housing. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

It's cheaper to buy than rent.

In Smoke's article, he went on to say, 

"Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value  of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home."

"Wile more than 85% of markets have burdensome rents today, it's perplexing that in more than 75% of counties across the country, it is actually cheaper to buy than rent a home. So why aren't those unhappy renters choosing to buy?

Know your options. 

Perhaps you have already saved enough to buy your first home. HousingWire reported that 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)

Many first-time home buyers who believe that they need a large down payment may be holding themselves back from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

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. Let's get together and consider some options!

 

Andreas Holder, Chicago Real Estate AgentAre you thinking about buying a home this year in Chicago? Andreas Holder can help! Let him be your guide to the downtown Chicago real estate market and help you find a home that not only matches your needs, but your lifestyle too.
Learn more about Andreas or start your home search now.

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