I’m talking about the rental trap. One of the biggest benefits of owning your own home is that you can lock in your housing costs for the life of your mortgage. Once the mortgage is paid off, your housing costs will experience a sharp decline. Does this interest you? It should.
But you need to get started on purchasing a home. Don’t get caught in that rental trap. You know – the one where, due to rising rental rates, you cannot save enough to purchase that starter home. The rental rates are rising due to a low vacancy rate, and a lack of new rental construction. Simply put, there is more rental demand than ever, and there are not enough available rentals units.
It’s expected that rental rates will outpace the appreciation that homes will experience in the coming year. Nationally, the number of households paying more than 50% of their income rose to over 11 million!
It has reached the point where it actually costs less per month to purchase a home than to rent an equal unit. And by paying rent that exceeds the cost to purchase, people are facing a more difficult task in saving the necessary down payment. These households are struggling to save a little cash for emergencies and to pay their monthly bills such as food, healthcare insurance and utilities.
So what are your options? Try to save some money each and every month. Possibly family members can give you money for the down payment. FHA mortgages only require 3.5 cash down, and possibly the closing costs can be folded into your mortgage.