According to USiHomes, rents all over the US continue to soar upwards, and online real estate database Zillow has recently found out that renting a home is now twice as expensive as buying one. According to their recent affordability report, in the third quarter of 2014, renters in the US were spending an average of 30% of their monthly incomes on rent, while homeowners were spending just 15% of their monthly incomes on their mortgage payment.
These findings shed light on a major shift that has occurred in the US housing market over the past few years. In the years before the real estate bubble, between 1985 and 2000, rent was usually more affordable compared to buying houses, in most US cities. Now, in most American metros, if you can just come up with a down payment, you are much better off buying your own house than renting.
In Charleston, as of January, 2015, the average apartment rent within 10 miles of the city is $1302. One bedroom apartments in Charleston rent for $1059 a month on average and two bedroom apartment rents average $1330. The average sales price for a home in the Charleston area is $225,000. With a 20% down payment, the mortgage payment, with taxes and insurance, would be around $1100.
This trend of renting being half as affordable as buying a home is one of the reasons why many housing marketing experts believe 2015 will be the year that most Millennials finally break through and enter the real estate market to buy their first home. It is predicted that the persistently high rents will push many of these young potential buyers into homeownership as it continues to make less financial sense to continue renting if they can put together a down payment.
Is it time for you to stop paying rent and buy a home? Our knowledge and expertise can help guide you through the process of becoming a home owner. Contact us today!