In a recent press release, Zillow stated that the affordability of the nation’s rental inventory is currently much worse than affordability of the country’s home sale inventory. The release revealed two things:
Furthermore, renters pay more than the average of 24.9% that was paid in the pre-bubble period while buyers
actually pay far less than the 22.1% share homeowners devoted to mortgages in the pre-bubble days.
Don’t Become Trapped
If you are currently renting you could get caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment. Zillow Chief Economist Dr. Stan Humphries explains:
"The affordability of for-sale homes remains strong, which is encouraging for those buyers that can save for a down
payment and capitalize on low mortgage interest rates… As rents keep rising, along with interest rates and home values, saving for a down payment and attaining homeownership becomes that much more difficult for millions of current renters.”
Know Your Options
Perhaps you already have saved enough to buy your first home. HousingWire recently reported that analysts at Nomura believe:
“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.
It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.”
Freddie Mac came out with comments on this exact issue:
Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.