Have you seen the increase in rent?

Renters Look to Buy As The Cost of Rent Spikes

A young couple sat in my office, and they were a little frustrated. They told me about how their rent had increased again. We took a look at the numbers of the cost to rent versus buying a home in the growing area of Northville, Michigan where they wanted to live. Their frustration began to fade after they saw what kind of home they could own with the money they were paying in rent.

If you are feeling the pressures of renting, you are not alone. According to MSNRealEstate.com,

          “In June, the real-estate data firm Trulia analyzed the rent prices in 25 of the largest rental markets in the United States. What Trulia found is an average annual increase of 3.9%. This is a huge increase when compared with inflation. And, generally speaking, incomes are not keeping pace with rent increases, putting renters in an even tighter position.”

In the city of Boston alone, the rates for renting rose 5.5%. There are now many renters paying up to half of their income just to rent. Renting could seem as the safe option especially to those in their 20s, however, by renting it’s actually costing you more money.

Buying is More Affordable Than Renting

Right now buying a home is actually the more affordable option and that will continue to be the case. In fact, it will continue to be the case until the 30-year fixed interest rates rise to 10.4%. Currently, it is 41% cheaper to buy than it is to rent.

Benefits to Buying

Financial reasons are not the only benefits to buying. For many people, it is the American dream to own their home and to have a backyard for their children to play. While that dream has been threatened, many still hold out hope. The good news is that buying a home has never been so affordable.

The Good News on Mortgage Rates

Much of our country has been watching the interest rates slowly rise after being at an all time low of 3.5%. In August, the rates rose to 4.4%. As the economy comes back and jobs are more secure, more and more people feel confident investing into the purchasing of a home.

The good news is that right now, even as the interest rates have risen, you can still get a lot of house for your money.

If you have been renting, have felt the increase in rates and would like to save money by purchasing your own home, give my office a call. We would love to help you find your dream home.