As we have reported multiple times, the Federal Reserve has determined that a homeowner’s net worth is 36x greater than that of a renter.
There are many renters out there who want to become homeowners, but don’t believe that they can afford to make the jump. There are also many Millennials that haven’t yet left their parent’s home, who are making the decision to move out into a rental instead of a home, for the same reason.
Triple Crown Realty is here to educate potential homeowners on the current conditions and programs available to help them make the informed decision to stop renting and start building net worth as a homeowner is the first step.
“Either Way You’re Paying A Mortgage”
The truth and simplicity in the statement, “either way you’re paying a mortgage, yours or your landlord’s,” is the “aha” moment that many may need to realize that there is a better way. Simply and effectively breaking down the market and getting the information out there to decode the conflicting reports that many potential homeowners are exposed to every day is step two.
RENTAL COST – Where it’s Been & Where it’s Going
“Over the past fourteen years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand, and insufficient growth in the supply of rental housing. This has created real opportunities for rental housing owners and investors, but has also been a bitter pill to swallow for tenants, particularly those on an entry-level salary and those would-be buyers struggling to save for a down payment on a home of their own,” said Zillow Chief Economist Stan Humphries.
“Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn’t out of the question. In fact, it’s probable.”
The median cost of renting has skyrocketed since 1988, as shown by the graph below.
Potential homeowners need to know that they can lock in their housing cost for the next 30 years by signing a mortgage.
OWNING A HOME
Renters & Millennials making the first step into independence by moving out of their parent’s home need to know that now is a great time to buy. Interest rates and home values are expected to climb in 2015.
The opinion of the 100+ experts who participate in the Home Price Expectation Survey is that home values will increase by approximately 3.8% over the next twelve months and by over 23.5% over the next five years. The entities that project future mortgage rates see them increasing by almost a full percentage point by the end of the year.
This means that the median priced home in the country will ‘cost’ a buyer almost $180 more a month by this time next year. That will be an additional $2,100 paid annually by the purchaser; about $63,000 over the life of a 30-year mortgage.
They say, “Ignorance is Bliss”. We at Triple Crown Realty – Keller Williams believe that an educated consumer with the insights they need to make an informed decision will be much happier in the long run.
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