Don’t Give Up on Buying a Home if You’re a Millennial Renter

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Almost 25% of Millennials (ages 26-41) claim they plan on renting forever according to this Apartment List article. That’s nearly double the amount since they started their ongoing survey of 31,000 Millennials in 2018.

In the grand scheme of things, 1 in 4 Millennials swearing off homeownership forever isn’t earth-shattering news. To put things in perspective, the highest rate of homeownership ever was 80% in North Dakota back in 1900. But generally speaking, the homeownership rate has hovered in the 65% range nationally for almost 5 decades. Some people will always be renters; homeownership isn’t for everyone. 

There are four main reasons they give for not buying:

• They feel it’s financially risky (19%)
• Don’t want the costs of maintaining a home (30%)
• They like the flexibility renting allows (28%)
• Can’t afford to buy a house (77%)

Obviously, by far the biggest reason is affordability. It’d be easy to chalk that up to the recent surge in home prices and rising interest rates. It’s legitimate and true. But that’s also been the main reason since well before the current market conditions. Truthfully, affordability is almost always the reason renters give for not buying, regardless of the decade. It’s never an easy financial leap to take.

However, while renting may feel like the easier, more affordable option, over time it’s not. In fact, renting is getting even more expensive. According to this Fortune article, an increasing amount of older adults are struggling to be able to pay rent. They’re constantly in fear of rent hikes that may just get to a point they can’t afford to pay. Then what?

While it’s never an easy financial leap to take, once you take the leap, your housing cost can be kept stable for years to come, and even go down as you pay off your house. Sure, it won’t be easy up front, but think of how it’ll be for you a couple of decades from now. Would you rather have an asset you can sell, or still be paying a landlord an ever-increasing amount of rent with nothing to show for it? 

Sure, prices and rates may seem high right now, but it almost always feels that way relative to the times. There’s always an area and a house you can afford to buy a house in, if you’re qualified for a mortgage. (And if you’re not, it’s worth making an effort to be qualified!) Your first house may not be everything you want or where you ideally would like to live, but it’s a first step toward taking control of being able to afford to live comfortably as you get older. It may seem years away right now, but time has a way of creeping up on you. And the cost of living does, too… 

The Takeaway:

Considering the financial burdens many Millennials have, coupled with rising interest rates and home prices, it’s no surprise that an increasing number of Millennials are saying they’ll never buy a home and remain renters forever. 

But if you can afford to rent, the chances are you can afford to buy. It might not be your dream home, or in the exact neighborhood you’d prefer, but you can buy something. Buy where (and what) you can afford now, so that you have a predictable and controllable cost of living — as well as an asset you can sell — as you grow older.

Let’s discuss your real estate goals. Jennifer Hanley, REALTOR The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2700 HanleyHomeTeam.com

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Rent vs Buying – Is The Time Right to Buy?

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Making the decision to buy a home is a big one—and you want to make sure you’re ready.

But how do you know when you’re ready to make the transition from renting to homeownership?

A recent article from realtor.com outlined key questions to ask yourself when you’re determining whether you should keep renting or make the jump to homeownership, including:

• Do I have enough savings to cover closing costs? If you’re considering buying a home, chances are, you have enough saved up for a down payment. But before you make the decision to buy, you’ll also need to make sure you have enough saved to cover all the closing costs associated with buying a home (like the appraisal and inspection).
• How long do I plan to stay in the property? Ultimately, you want buying a home to be a smart investment; you don’t want to lose money. And in order to not lose money on the deal, you typically need to stay put for two to three years—so make sure you’re willing to settle in for at least a few years before you buy.
• Are you prepared for maintenance? When you rent, your landlord takes care of home maintenance—but when you buy, that responsibility falls to you. Before you make the decision to buy your own home, make sure you’re ready to tackle all the home maintenance projects—and costs—that come with owning property.

The Takeaway:

Bottom line? You want to make sure that, when you buy a home, you’re ready—and asking yourself these questions can help you gauge how prepared you are to make the transition. Let us help you with your decision – Kevin and Jennifer Haley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Homeownership Still More Affordable Than Renting In Most US Counties

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Most people think that renting a home is a more affordable option than buying. But, as it turns out, in the majority of counties across the US, the opposite is actually true.

According to the 2021 Rental Affordability Report from ATTOM Data, which analyzes rental, wage, and home price data in markets across the country, owning a median-priced three-bedroom home is more affordable than renting a three-bedroom home in nearly two-thirds (63 percent) of counties in the US—even though home prices are increasing at higher rates than rental prices in 83 percent of those counties.

“Home-prices are rising faster than rents and wages in a majority of the country. Yet, home ownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check,“ Todd Teta, Chief Product Officer at ATTOM Data Solutions, said in the report. “It shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and home ownership.”

The Takeaway:

So, what does this mean for you? If you’ve been holding off on buying a property because you thought renting was the more affordable option, you may be able to transition to homeownership for less than you’re paying in rent—making now a great time to explore buying your own home. Give us a call to discuss today! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Rent vs Buy – Now vs Later

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If affordability is a concern and you are unsure were you’d like to live in the near future, you may find this article on the hidden long-term cost of renting compelling.  It’s called “The $700,000+ mistake nearly 6 in 10 millennials may make.” You can check out the article here:

http://www.marketwatch.com/story/the-700000-mistake-nearly-6-in-10-millennials-may-make-2015-01-22

Renting in the short-term may be your best option, but waiting to buy can have a high cost. For example: “At current rates of appreciation, in 10 years the average home (now priced at $190,000) would be selling for about $249,000. If interest rates return to their historical norm (from over the past 15 years) of 5.6%, a monthly house payment (including mortgage, taxes and insurance) on a $249,000 home would be $1,574 a month, a 52% increase over the $1,037 house payment for a median priced home now.”

If you ever have any questions about home ownership, we are more than happy to help you plan for your future. Kevin and Jennifer Hanley, REALTORS TheHanleyHomeTeam.com 904-515-2479

Can I Buy Again? I Had a Short Sale A Few Years Ago.

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This month we’ll be reaching out to friends and clients who were swept up in the real estate downturn to check in and see how they’re doing. Many have been in touch recently about the possibility of returning to home ownership.

You might have some of the same questions they have. For instance: Can I get a mortgage? Have home values stabilized? Is it possible to buy again for what I’m paying in rent now? How can I be sure I won’t end up in the same situation?

The truth is, many people who lost their homes as little as two years ago may already be in a good position to buy again. Home prices and fixed-rate mortgage rates are quite favorable. There are many excellent homes on the market which can easily fit in a budget accustomed to current rents. Plus, it’s cheaper to buy than to rent in our area.

If you’re thinking about returning to home ownership, we’d be happy to answer questions you might have, and even connect you with trustworthy lenders who can help you navigate pre-qualification for an affordable home.

Why continue to tolerate the hassles of renting if you can transition back to a home of your own? Perhaps it’s time to say goodbye to absentee landlords, long waits for maintenance requests, and loud neighbors.

If you’d like to stop dreaming about it and start doing something about it instead, let’s have a conversation and see what we can do together to get you back on track for your own home. Kevin and Jennifer Hanley, REALTORS 904-422-7626 http://www.HanleyHomeTeam.com or http://www.HanleyShortSales.com