Wednesday February 10, 2016
Rent or buy. It’s a question many face, especially those millennials who are a few years out of college, perhaps even married with a child, yet still paying rent. Many wonder if the investment of a home is worth it. If the costs will justify themselves.
We came across this great tool from Trulia that helps potential buyers see how much of a savings owning a home can provide, compared to renting an apartment or home. For example, for someone spending $1,000 per month renting an apartment who is looking for a home that costs $140,000, the costs result in a 27% savings of owning versus renting with a 30 year mortgage. The fact remains: you can save money while simultaneously building equity.
While we do expect rates to continually increase this year, by a half to a full percentage point by year end, it will not wipe out the financial advantage of buying over renting. While the initial costs of buying (or building) a home are more expensive, over time the buyer will end up saving more money. And with housing costs at all time-lows (still, even with slight rate increases), now has never been a better time to make the investment.
New government initiatives such as Fannie Mae’s HomeReady Program, which will allow borrowers to qualify for a mortgage using income from other household members not listed on the mortgage, open up the possibilities for many first time homebuyers. So if you’re currently sharing rent payments with a number of friends or relatives, this might be for you, as a chance to start building equity.
Many economists argue that the biggest risk in the 2016 housing market is lack of inventory. With Faber Homes, you never have to worry about inventory, as we are breaking ground everyday on our customer’s dream homes. If you’re ready to entertain a move away from paying costly, zero-return rent payments, we’d love to show you what you’ve been missing.