Rent or Buy?
Rent or buy a home? This is a common consideration for most people who moving to a new town, or who have become employed with a stable income or who are simply tired of renting. Whether you are at your parent’s house, sharing an apartment or renting a house, renting has many advantages: flexibility, more predictable costs, and less responsibility. But is it financially worth it?
According to a report filed by CNBC, renters paid $441 billion in 2014. Some key drivers include soaring rents due to shortage of rentals available. This problem is forecasted to continue through 2015. Furthermore, the report claims that due to weak income growth, the pace of rising rental rates continue to soar. More houses are forecasting to be built as rental apartment construction declines. The fast paced rise in home prices has the home market cooling off. The slower sales will keep prices at a more reasonable rate. Plus, mortgage rates are still comparatively good.
This CNBC outlook is a pretty good snapshot of what is happening in Austin. Of course, as a first time home buyer, considering whether to rent or buy can be overwhelming. Primarily, coming up with a down payment for a mortgage can be a factor in deciding on home ownership. However, there are paths to make the option to buy a home a little easier. Here are some ideas to assist with down payment:
- Selecting a program with no down-payment requirement (VA for veterans or USDA for rural communities)
- Assistance from a government or non-profit entity
- A gift from a relative
- Buying a home with someone else, so you can pool your funds (and income)
- Borrowing from or withdrawing from your retirement funds
With these tools, down-payment becomes less of an obstacle to obtaining a mortgage. If you would like to learn more about these ideas or know someone who is ready to explore or take the first step in home ownership, send them a link to the CNBC article or give me a call. I am happy to provide a no obligation consultation on first time home purchases.