"I Want To Own A Home In Atlanta, But Is Renting Less Expensive?" This was a question posed by one potential home buyer at a recent home buyer workshop.
People often ask if now is a good time to buy a home, but nobody ever asks when is a good time to rent. Regardless, we want to make certain that everyone understands that today is NOT a good time to rent.
Rents Are On The Rise
The Census Bureau recently released their 2017 first quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:
As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether or not you should renew your lease, you might be pleasantly surprised at your ability to buy a home of your own instead.
One way to protect yourself from rising rents is to lock in your housing expense by buying a home.
Most Millennials Want To Buy
Apartment List, an online rental marketplace conducted a survey of 30,000 American renters. They found a majority of millennial renters (79 percent) want to buy a home, but that affordability is the biggest obstacle. And the study found, the situation to be slightly worse in the ATL. In Atlanta, 85 percent of millennials said affordability was the main issue.
The research also revealed that on average millennial renters in metro Atlanta have saved about $2,980 towards the downpayment for a home.
The Down Payment May Not Be As Much As You Think
Yet another survey by Ipsos revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 40% of consumers think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less. In fact, 3%-3.5% down payment loans are the most popular written in the Atlanta area. .
This is a great advantage for buyers. The chart below shows how a renter paying $1,000 per month for rent would benefit from purchasing a $150,000 home paying the the same $1,000 per month for mortgage.
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Rent vs. Own Result Rent Saved $66,307.57 Closing Costs -$5,790.00 Equity in Home $46,325.27 Loss of Interest on Down Payment $0.00 Total Mortgage Payments -$41,463.60 Tax Savings $7,738.16 Benefit of Owning (vs. Renting) $73,117.39
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Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket. Along with the many down payment assistance programs available in the Atlanta area many renters could be in there own home a lot sooner than they think.
If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, let’s sit down to help you understand your true options. You can also click below to see if you qualify for down payment assistance.
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