Is Buying a Home in the US Really Cheaper Than Renting?

Buying vs Renting

The results of the 2018 Rental Affordability Report from ATTOM show that buying a median-priced home is more affordable than renting a three-bedroom property in 54% of U.S. counties analyzed for the report.

The updated numbers show that renting a three-bedroom property in the United States requires an average of 38.8% of income.

The least affordable market for renting was Marin County, CA, just over the Golden Gate Bridge from San Francisco, where renters spend a staggering 79.5% of average wages on rent, while the most affordable market was Madison County, AL where 22.3% of average wages went to rent.

Other interesting findings in the report include:

  • Average rent rose faster than income in 60% of counties
  • Average rent rose faster than median home prices in 41% of counties
  • While median home prices rose faster than average rents in 58% of counties

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to find your dream home.

Buying vs Renting Infographic

NOT Owning Your Home Can Cost You a Lot of Money!

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

Realtor.com recently reported that:

Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option… as people get more savings in their pockets, buying becomes the better option.”

What proof exists that owning is financially better than renting?

1. In a previous blog we highlighted the top 5 financial benefits of homeownership:

  • Homeownership is a form of forced savings.
  • Homeownership provides tax savings.
  • Homeownership allows you to lock in your monthly housing cost.
  • Buying a home is cheaper than renting.
  • No other investment lets you live inside of it.

2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.

3. Just a few months ago, we explained that a family that purchased an average-priced home at the beginning of 2018 could build more than $44,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment– along with a profit margin!!

Renting or buying Infographic

Owning a home has always been, and will always be, better from a financial standpoint than renting.

Whether You Rent or Buy, Either Way You’re Paying a Mortgage

There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize, however, that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage as opposed to paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.22% last week.

Buying A Home Is More Affordable Than Renting In 54% Of US Counties

 According to ATTOM Data Solutions’ 2018 Rental Affordability Report, “buying a median-priced home is more affordable than renting a three-bedroom property in 240 of 447 [or 54% of] U.S. counties analyzed for the report.”For the report, ATTOM Data Solutions compared recently released fair market rent data from the Department of Housing and Urban Development with reported income amounts from the Department of Labor and Statistics to determine the percentage of income that a family would have to spend on their monthly housing cost (rent or mortgage payments).

Daren Blomquist, Senior Vice President of ATTOM Data Solutions had this to say:

“Although buying is still more affordable than renting in the majority of U.S. housing markets, the majority is shrinking as home price appreciation continues to outpace rental growth in most areas.”

However, the report also shows that the average fair market rent rose faster than average weekly wages in 60% of the counties analyzed in the report (266 of 447 counties). With rents rising, many renters should consider buying a home soon.

Rents will continue to rise, and mortgage interest rates are still at historic lows. Before you sign or renew your next lease, let’s get together to help you determine if you are able to buy a home of your own and lock in your monthly housing expense.

If you’re ready to make the smart switch from renting to becoming a homeowner, we’re excited to help you get the process started. Click here to schedule your FREE Buyer’s Consultation and let us help you get on the path to your dream!

The Secret to Looking at Homes Like a Pro!

How to Look for New Homes

When you’re pre-approved by a lender and ready to start your home search, you want to be smart and prepared. That’s because searching for homes can be exhausting and overwhelming. And all the properties you look at can begin to meld together in your mind.

When looking at homes for sales, there is a right way and a wrong way. Yep, I said it. Let me show you the right way to look at homes so you can be sure you’re buying the right house for you and your family.

Act Like You Own the Place

When most people go on their home search, they go inside and walk around like they’re a guest. That’s because they are. But unfortunately, what happens is they never focused on what it’s like to really live in that place.

For example, how’s the water pressure in that beautiful custom waterfall shower? The only way to find out is to turn it on. This may seem a little unorthodox but most homeowners don’t mind this kind of hands-on approach. As long as it doesn’t involve rummaging in their stuff. That’s because they put that gorgeous shower head in their bathroom and certainly want you, the potential buyer, to appreciate it, too.

This also goes for lighting. Turn on every light in the house to see if there are any dark spots in the house you just can’t live with.  And when it comes to the plumbing, don’t stop with the showers. Make sure the hot water comes on quickly and the pressure is good in the kitchen and other sinks, too.

Open windows and see how well they open and close. There’s nothing worse than a sticky window. Also in the winter months, you can feel for drafts in the windows.

Put on Your Listening Ears

During your search, you want to slow down long enough to listen for sounds – in the house and outside. Is there a noisy dog who hasn’t stopped barking yet? Are you in a condo where you can hear the pitter-patter of adult feet? Or is the guy across the street blasting his music while he’s cleaning the garage? All these can be indicators of an annoying problem if you buy that house.

Get Outside

After you preview the inside, and you still love the house – it’s time to take the show on the road. Start by driving around the neighborhood. Then get out and park so you can take a stroll through your prospective neighborhood.

See if the neighbors are friendly or drive too fast through the streets. Are there lots of kids or a bunch of young professional types? And if after all that, you still love the neighborhood – come back later. Drive through again on a Saturday or an evening after work. This can tell you a lot about a neighborhood.

One final thing to look at if you want to go through the trouble is to drive back to that home during rush hour. Or better yet, drive there straight home from work and see if that drive home is something you can live with.

Have you been pre-approved to buy your home yet? If not, find out how much you are pre-approved to buy by filling out our simple pre-approval form HERE.

Summer Is Here! Is Your Patio Ready for the Outdoor Fun?

How to Make Your Patio Ready for the Summer

Here in Florida, summer’s what we live for! The beaches, warm breezes, pool parties, and entertaining outdoors is what we wait all year to enjoy.

It doesn’t really matter where you live, or how long or short your summer is. All that matters is we get one. Happy Dance!! And the perfect way to enjoy this season is to spend time outside. But is your outdoor space ready for the fun?

Do sweat the small stuff

Since most Floridians leave their patio furniture out year round, those tables and chairs will most likely need some TLC before sending out invites to your next backyard party.

A buildup of dirt and debris dulls the finish and shortens the life of patio furniture. Use a damp cloth to wipe off “the gunk.” If the accumulation requires more work, use a few drops of dish soap in a bucket of water, and a scrub brush. Depending on how long it’s been between cleanings, you may need to blast the furniture with a power washer. If so, we feel your pain.

Anything that appears unsafe or broken should get tossed in the trash. Then, check the bolts and screws and tighten any that need it. For moving parts and hinges, a couple of squirts of a lubricant, such as WD-40 or an all-purpose oil will quiet any squeals.

Check Your Cushions

To avoid embarrassing situations like your mother-in-law getting up from her chair to at the barbecue with dirt stains on her hiney, you’ll better pay attention to those nasty patio furniture cushions.

Remove the cushion covers and launder them. The cushions should be attended to with a vacuum, according to Bob Vila of This Old House fame. After you suck out the debris, scrub them clean with a solution of 1 tablespoon of dishwashing liquid in a gallon of warm water.

Got mildew? Vila suggests adding one-quarter cup of borax (an all-natural mineral powdered product) to the solution and allow the cushions to soak for 15 minutes. You can even use the borax for mildew stains on the covers, depending on the material (check the labels).

Then, run the hose over the cushions to rinse off the solution and allow them to air-dry. Don’t rush to put the covers on until the cushions are completely dry, or you’ll end up creating more mildew.

Check for Damage Like Rust

Humidity is great for our skin but takes a toll on our metal patio furniture. The Family Handyman has several suggestions for how to rid the furniture of the red/brown stuff:

Rust Remover

Ah, rust remover products. With ingredients such as hydrochloric or phosphoric acid, how can we go wrong?

Well, when the instructions caution you to wear goggles, a respirator mask, and gloves, you know this stuff isn’t to be taken lightly.

If you’re ok with chemicals, head to the paint department of your favorite home improvement store and buy rust removers, such as Rust-Oleum® Rust Reformer, Krud Kutter or one of the “4 Best Liquid Rust Removers” recommended by Popular Mechanics.

And, do follow every word of the instructions on the label to avoid any accidents, injuries, or further damage to the furniture.

By the way, our friend, handyman.com says that there are “newer non-toxic and acid-free soaking solutions, such as Evapo-Rust” (which he got at an auto parts store).

Rust converter

Of all the terms homeowners learn; “rust converter” is probably the most unfamiliar. Rust converter can be either an aerosol spray or a liquid that you brush on, like paint.

“It kills the rust, prevents its spread and dries into a ready-to-paint primer,” according to the Handyman. Prep the surfaces by rubbing with a wire brush and then spray or brush on the product. When it dries, you can either paint the surface or, as the handy guy recommends, apply another primer and then paint.

Cleaning patio furniture is a lot of work, but well worth it when your summer soirees are the talk of the town . . . or at least the neighborhood.

Is It Must or Lust? 3 Ways to Win in Your Home Search

How to Narrow Your Property Search

When you get the green light by your lender to start searching for properties, the excitement can quickly become all-consuming. Your heart is filled with all the dreams in the world.

It’s really easy to get caught up in the “I have to have ___________,  so I’ll cut back somewhere else ” game, even when you don’t actually know where that somewhere else is or if you can realistically cut back there.

Understanding how to know the difference between a must-have or a lust-have will be the key to winning in your home search and finding the house of your dreams AND reality.

Make Your List of Lusts

Start by getting everyone in the family together on the couch and have each person make a list of everything they want in your house. This ‘il be fun! 😉

Think of the things you lust after on your Instagram feed. If you love it, jot it down. 

Once you and your partner (and the kids) have everything down, make a new list starting in order from things you want most to least. Do you need more space? Do you need a big yard? A walk-in closet? You get the point. 

Narrow your list down to your top 10, and then compare your list to your partner’s top 10. What things appear on both lists? Those items should carry more weight because you both want them in your home.

Now Highlight Your Musts

This is the part where you decide those things you strongly consider as “non-negotiable.”

  • For example, if your family must live in a particular school district, the location will become a Must for you.
  • If you have a large family or run a home-based business, a certain number of rooms could be a Must for your family.
  • Your Non-negotiable list should be fairly short to give you enough variety in your home search. With home inventories being so low, compromise will often be needed.

Bring Your List When You Look at a Home

As you’re out looking at houses, keep your list handy. Maybe you’re not willing to give up hardwood floors for a jetted tub, but would you be willing to compromise for a jetted tub and extra square footage? Refer back to your must-haves list often. It’s easy to get distracted.

Here’s a quick checklist that I use when searching for a home. If you answer “yes” to all of these, then a “Lust” may be worth the splurge — that is, if you can be sure that you’ll be able to afford the feature (in terms of your monthly mortgage payments and living expenses).

  • Is it on both of your lists?
  • Is it something that’ll be extremely expensive and difficult to change or add?
  • Would you be willing to sacrifice something else to have it?
  • Would you feel like your house would be incomplete without it?

Searching for homes doesn’t have to be overwhelming or complicated. Using this simple process will keep you and your family on track to what you really want and will hopefully reduce conflict along the way. And we could all use some of that, right?

What are some of your MUSTS or LUSTS? Share them in the comments below and have a little fun!

How to Prepare for the Hidden Costs of Being a Home Owner

How to Prepare for the Hidden Costs of Homeownership

How do you avoid being surprised by unexpected costs once you become a homeowner? The answer is easy – by being prepared. And the only way to be prepared is to know what’s coming.

This is the key to living as a stress-free as a new homeowner. Knowing how much money to have tucked away is the key to your success. There are many situations that can arise as a homeowner that can cost you money unexpectedly. Here are a few key ways you can protect yourself and your savings!

Getting a Home Inspection

Once you put in an offer on the home you love, one of the most important tasks you must do is order a home inspection. The home inspection will confirm for you whether this house is a solid investment or a money pit. Your home inspector will inspect every part of your new home from the roof down to the foundation or crawl space and everywhere in between.

They will let you and the seller know anything that is or could potentially be a problem in the future. And knowing this will allow you to decide if you still want to go through with your purchase and allow you to get estimates for items that show up as problems.

If the hot water heater is showing signs of wearing out but still has a year’s time left; knowing this helps you to put money aside for when it does need to be replaced.

Lose The Renter Mentality

Many renters simply aren’t prepared to pay for the increase in costs of living in a new home. For example, many renters don’t pay for water or garbage pickup. Living in smaller apartments and transitioning to a single-family home can also bring with it a much larger utility bill.

There are also association dues and CDD fees that many newer communities require monthly, quarterly, or annually. This amount should be considered on top of your mortgage payment to be sure you have sufficient cushion.

Make Sure You’re Covered

It costs a lot more to insure a home, than say, a one-bedroom apartment. So even if you’re used to paying renters’ insurance, you’re going to have to increase the budget for insuring your new home. And, there are a lot of factors to consider when it comes to insurance.

Thought you saved more by buying an older house? Well, guess what: It’s going to cost more to insure it because the electrical, heating and plumbing are older and more prone to disaster. Wait, did you fall behind on credit-card payments but thought you were in the clear because you always paid your mortgage? Insurance companies can periodically check your credit score and raise your rates based on their assessment of your “risk” level.

Understanding exactly what to prepare for keeps those hidden costs out in the open. That way when you do have a surprise cost show up, it won’t be overwhelming!

To get YOUR homebuying process started today, simply click HERE to fill out our easy application!

 

FROM THE ARG BLOG