The prevailing opinion is that rising rent will cause more consumers to purchase homes. This is absolutely the case as you have seen statistics published time and time again that show it is actually cheaper to own in most areas of the country as opposed to renting. In addition, the stats continue to show rent rising from month-to-month and year-to-year. So how could rising rent hurt home ownership?
If you are a renter, you are likely spending a greater portion of your income towards your rent. Therefore, as rent rises, it is harder and harder to save for a down payment. That is why many Millennials are staying at home with their parents and when they move out, they are purchasing instead of renting. But for others, it gets harder.
What does this mean? For most, it means that the faster you become a homeowner, the better. Once you are a homeowner, you are protected from inflationary increases in payments as only a small portion of your payment (taxes and insurance and association fees) is subject to annual increases. Eventually, more apartments will be built and the rent/ownership equation should even out. For now, we are seeing first time homebuyers starting to awaken to the fact that sooner is better with regard to home ownership.
Author:Keith Judish Phone: 623-224-7956 Dated: July 21st 2015 Views: 294 About Keith: O'Keith Judish licensed REALTOR® with Realty ONE Group serving the West Valley and Phoenix Metrople...
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