Renter Anxiety Is Increasing
If you have been around enough boat owners then you have heard some say that the two happiest days they had are the day they bought the boat and the day they sold it. They are pretty open that is better to have a friend who owns a boat than to own a boat yourself. This might be true for some boat owners who do not want the responsibility of storage, maintenance, and repairs. This might especially be true given the cost of this purchase. However, this logic does not apply to all large purchases. Even though owning a house is a big responsibility, not owning one does not necessarily save you from anxiety. The fact is that renters are facing increasing anxiety from a host of factors. Fortunately, there is a solution. You can take steps to stop renting and become a homeowner.
It is Better to be a Homeowner than a Renter
Homeowners are reaping the rewards of a rising real estate market, while renters are feeling the pain. Rising home values might be stressful for potential home buyers, but it is a blessing for current homeowenrs. Tappable home equity in the United States has reached another all-time high. According to research from Black Knight, tappable home equity has reached $9.15 trillion. Meanwhile, renters are facing all-time highs of their own, unfortunately, they are not the type that make you feel warm and fuzzy inside. Rents are increasing dramatically from California to Florida. Even worse, this trend is expected to continue for the foreseeable future. Renters are finding that more and more of their income is being spent on housing as landlords make their rents higher and higher. Quite simply, it is becoming more and more expensive to rent, which is why renters are feeling increased anxiety.
On top of the rising costs of rent, there are a lot of downsides without actually owning the property that you live in. Leases often place strict limits on the types of upgrades and renovations that you might want to make for your place. Typically, you are not able to do much to change your landscaping or change the color of your home. You are forced to live with the aesthetic choices made by your landlord and do not get to express your full creativity. On top of that, lease agreements often have clauses that prevent you from letting others stay with you. This prevents you from having longterm visitors or even considering renting out a room or two. Basically, when you rent, you do not get to make all of the decisions regarding the place you live. You are at the mercy of your landlord and your lease.
Renters are Anxious About Becoming Home Buyers
While being a homeowner might be better than being a renter, many renters are skeptical as to whether they are able to become a homeowner. A recent survey suggests that 48 percent of renters worry they will not be able to afford a home within their lifetimes. A vast majority of the respondents of this survey who are worried are millennials or Gen Z. Many of the younger generations do not have as many assets as previous generations and wages have not been keeping up with inflation. At the same time, home prices have risen to all-time highs.
There is no ducking the fact that today’s high home prices are partially behind the anxiety that renters have when they think about buying a house. New data from CoreLogic indicate that home prices in July were up over 18 percent from July of 2020. The 18 percent year-over-year increase is an all-time high. Fortunately, the rapid rise in home prices seems to have reached its end. Home prices are still increasing, but at a much slower rate. The data analysts at CoreLogic predict that home prices will only increase about 2.7 percent over the next year. This is great news for renters who are considering being homeowners. The market is leveling out and this gives you an opportunity to take steps to buy a house of your own.
Final Thoughts
Many renters might feel as if they’re caught between a rock and a hard place. Rent is rising and keeping up with it is untenable. At the same time, it might feel like buying a house is not in the cards. Fortunately, this is a false dilemma. Buying a house is much easier than you would ever imagine.
The first week of September is a big week for real estate in Boston. More renters move that week than any other week in the year. Consequently, this is also one of the most expensive weeks of the year for renters. In the Boston real estate market, it is quite common for renters to pay first month, last month, security deposits, and even leasing fees. Altogether, renters are paying thousands of dollars everytime they sign a new lease. The reality is that the difference between these costs and the cost of a down payment is not nearly as much as you think. Remember, in most cases you do not need 20 percent for a down payment. There are many programs, especially for first-time home buyers, that only require a down payment as small as 3.5 percent.
The bottom line is that renters do not have to deal with the continued anxiety of being a renter and they should not have anxiety about buying a hosue. You have options. All it takes is the willingness to explore them. If you are tired of being a renter and want to enjoy the benefits of being a homeowner, contact us. The team at Peoples Choice Mortgage is here to help you through every step of the process. We will give you a realistic look at the mortgage options that work for your financial situation and help you make a plan to achieve your goal of buying a home.
