Here’s the Situation: You think you don’t have enough money saved to purchase a home, so you’re renting for a few more months… or even years.
But here’s the Problem: The cost to rent is steadily increasing; however renter’s total income is not. In turn, a higher percentage of income goes towards rent and less can go towards savings.
According to a study from the National Association of Realtors, “The gap between rental costs and household income is widening to unsustainable levels.”
The study found that over the past five years, the cost to rent rose 15%, however renter’s income has only improved by 11%. So there’s your catch 22… While rent continues to go up, your income is missing the extra boost to allow for maximum savings. In addition, home values are rising making it even harder to keep up. And as long as this trend continues, saving for a down payment will continue to become harder and harder.
So while many first-time homebuyers may think waiting longer is a good idea, it actually could end up doing them a disadvantage…including missing the opportunity to take advantage of today’s still low rates.
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Here’s the Key: If you or someone you know is currently renting and/or saving for a down-payment, contact us sooner rather than later to get the conversation started. It’s never too early to speak with your Lender. In some situations, you may not need as much saved for a down payment as you think. Plus, our loan officers are Certified Path2Buy Coaches; meaning they’ll educate you on your current financial situations, evaluate your best options, and create a customized checklist to get you on the fastest path to savings and home ownership!