Wednesday, February 20, 2019 / by Nicole Solari
All Generations Believe Renting Is More Affordable Than Owning—Even Though It’s Not True
According to new research from lender Freddie Mac, every generation—from millennials to Gen Xers to Baby Boomers—are continuing to rent because they think it’s saving them money. According to the report, 76% of Millennials, 75% of Gen Xers, and 81% of Baby Boomers said renting was the more affordable option.
But with rents rising across the country, that’s just no longer the case. According to the most recent Market Outlook Report from Realtor.com, rents rose year over year in nearly ¾ (73%) of counties across the United States. And according to Trulia, it is now more affordable to own a home than to rent in a whopping 98% of the largest metro markets in the US.
The misconception that renting is more affordable than homeownership is not only costing renters of every generation money, it&r ...
Monday, February 04, 2019 / by Nicole Solari
WHOSE MORTGAGE DO YOU WANT TO PAY? YOURS OR YOUR LANDLORD’S?
There are some people who haven’t purchased homes because they are uncomfortable taking on the obligation of a mortgage. However, everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As Entrepreneur Magazine, a premier source for small business explained in their article, “12 Practical Steps to Getting Rich”:
“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”
“The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market ...
Thursday, November 08, 2018 / by Nicole Solari
Recently, multiple headlines have been written asserting that homeownership is less affordable today than at any other time in the last decade. Though the headlines are accurate, they lack context and lead too many Americans to believe that they can’t partake in a major part of the American Dream – owning a home.
In 2008, the housing market crashed and home values fell by as much as 60% in certain markets. This was the major trigger to the Great Recession we experienced from 2008 to 2010. To come back from that recession, mortgage interest rates were pushed down to levels that were never seen before.
For the last ten years, you could purchase a home at a dramatically discounted price and attain a mortgage at a historically low mortgage rate.
Now that home values have returned to where they should be, and mortgage rates are beginning to increase, it is less affordable to own a home than it was over the last ten ye ...
Thursday, July 05, 2018 / by Nicole Solari
Rising home prices have many concerned that the average family will no longer be able to afford the most precious piece of the American Dream – their own home.
However, it is not just the price of a home that determines its affordability. The monthly cost of a home is determined by the price and the interest rate on the mortgage used to purchase it.
Today, mortgage interest rates stand at about 4.5%. The average annual mortgage interest rate from 1985 to 2000 was almost double that number, at 8.92%. When comparing affordability of homeownership over the decades, we must also realize that incomes have increased.
This is why most indexes use the percentage of median income required to make monthly mortgage payments on a typical home as the point of comparison.
Zillow recently released a report comparing home affordability over the decades using this formula. The report revealed that, though homes are less ...
Thursday, December 21, 2017 / by Hayley Baker
Rents Are On The Rise: Don’t Get Caught In The Rental Trap!
There are many benefits to homeownership. One of the top benefits is protecting yourself from rising rents, by locking in your housing cost for the life of your mortgage.
Don’t Become Trapped
A recent article by Apartment List addressed rising rents by stating:
“Rents are up 2.7% year-over-year at the national level. Year-over-year growth continues to fall between the 2.1% rate from this time last year and the 3.4% growth rate from October 2015.”
The article continues explaining that:
“Despite the seasonal slowdown, rents are still up year-over-year in 89 of the 100 Largest cities.”
Additionally, the Urban Institute revealed that,
“Over a quarter of renters, or 11.1 million households, are severely cost burdened, spending at least half their income on rental housing.”
These ho ...