Many young adults fall in to the trap that they can not afford a Sarasota home so they will settle for renting out an apartment. They will then lease out the apartment, condo, townhome, or even home and be subjected to a loss of equity in their name by throwing money away. In a recent release from Zillow, as of August 2014, the United State’s is currently seeing better affordability in the real estate market than in the renting market.
Here are some shocking statistics that actually came out from that survey:
- Renters paid approximately 29.5% of their monthly income towards rent
- Home Owners/ Home Buyers only paid 15.3% towards they mortgage on a home
During the pre-bubble days (2007 and before), people renting right now are actually paying 24.9% more than what they would have back then, whereas the Sarasota home owners are paying 22.1% less.
As rents increase, it is getting harder and harder to live a normal American life with less income in your bank account. According to the Chief Economist at Zillow:
“The affordability of for-sale homes remains strong, which is encouraging for those buyers that can save for a down payment and capitalize on low mortgage interest rates… As rents keep rising, along with interest rates and home values, saving for a down payment and attaining homeownership becomes that much more difficult for millions of current renters.”
In all honesty, you may actually have enough saved up and ready to use on the down payment as HousingWire noted:
“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.
It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.”
If you are still not thinking that you are able to afford a Sarasota Home, look at what Freddie Mac had to say on the issue:
- Home owners can get a conventional mortgage with just 5 percent down
- During 2009 to 2013, the down payments of less than 10 percent more than quadrupled for Freddie Mac
- One in Five home owners who borrowed money put down less than 10 percent
Overall, you can afford that property that you want. Don’t get caught in this rental bubble and throw money towards something that will not provide equity. Instead put money towards a Sarasota Home and enjoy the equity that you will get towards this property.