You don’t have to look far these days to find a news report or article talking about the skyrocketing costs of renting. Over the past few years, the numbers of renters have swelled thanks to the influx of prior homeowners and a huge generation of young adults (the “Echo Boomers”) moving out on their own. This, at a time when construction of new apartment and condominium buildings has been at an all-time low—meaning the supply of rentals is well below the growing demand of renters. As we all learned in school, this imbalance between supply and demand means just one thing: that monthly check to the landlord is starting to get bigger, and there’s no sign of rental prices coming down any time soon.
The good news is that as people flood into the rental market and drive up rents, some lucky renters are making one of the smartest financial decisions they can make: taking control of their housing costs, and avoiding skyrocketing rent prices, by buying their own home. They’re taking advantage of three factors that have converged to make this one of the most opportune times to buy a home:
Mortgage rates remain at historic lows, meaning that people who buy a home now have the ability to lock-in an extremely low interest rate on a 30-year mortgage. That’s thirty years of assurance that your housing payment will never go up. In the meantime, your hard-earned money will be going toward your own equity in your own home…rather than into your landlord’s bank account.
Home prices are some of the most affordable they have been in years, with buying a home more affordable than renting in nearly 80 percent of cities (according to online real estate site Trulia.com). The declines in home prices have finally stabilized, and in some areas, home prices are actually beginning to rise—meaning that the great deals aren’t likely to stick around.
Financing troubles have been in the news, and almost everyone knows someone or has heard about someone who had trouble securing a mortgage loan. The bad news is that legislation pending in Washington aimed at reforming the mortgage industry may well make securing a mortgage in the future even more difficult. For those with imperfect credit, or no downpayment, getting into the housing market before that legislation goes into effect may mean the difference between finally achieving the dream of homeownership and being stuck as a renter for another decade. Even for those with good credit, the rising cost of obtaining a mortgage may make homeownership an impossibility.
Of course, everyone’s financial situation is different, but one thing is clear: for renters, this is truly a gift-wrapped moment in which to buy a home. If you’d like to learn more about how low mortgage rates, low prices and easy financing can help you become a homeowner, just contact us or stop by one of our new home communities. We’ll be happy to show you around.