Deciding whether to buy or rent? Here’s some info that may help you with your decision.
HISTORICALLY NOW
Percentage of Income Necessary to Afford Median Rent
26% 30%
Percentage of Income Necessary to Afford a Median Home
21% 15%
If you are currently renting, but you don’t think you can afford to purchase your own home – THINK AGAIN!
It costs significantly less to purchase a home than to rent a home!
Either way, you are paying a mortgage, if you buy, you pay your own mortgage. If you are a renter, you are paying the landlords mortgage.
Historically, choosing between renting or home ownership has been a close decision. But in today’s market, the percentage of income needed to rent a median priced home (30%) is considerably more than the percentage of income needed to purchase a median priced home. In my opinion, the choice is obvious.
When you own your home, you are building equity. Real estate taxes and mortgage interest are deductible. When you rent, at the end of the year you have a pile of cancelled checks. And what if the landlord decides to sell the property?
Now, I realize that every market is different, but nationwide this trend is holding true.
Before you you renew your lease the next time, speak with a mortgage rep first. You may find out that you can qualify for a mortgage and use your rent money to pay your mortgage – not the landlord’s.