Freddie Mac recently compiled a survey finding that 84% of renters believe that renting is more affordable than buying a home. When they polled homeowners, 85% of them said owning a home is more affordable than renting. Who is correct? Well, you have to take a deeper look into the financial picture and have a full understanding of current loan programs to really see the answer.
A lot of renters still believe you need to put 20% down to purchase a home, which may lead to miscalculating their financial plan. Also, the latest release from the Consumer Price Index (CPI) showed that rents increased last month by 0.4% and by 3.8% year over year! On the other end, if you purchased a home last year, CoreLogic reported that homes across the nation on average increased in price by 4% and are forecasted to increase by 5.2% going forward. Going back to the survey data, we see that 40% of renters are saying that they plan to purchase a home sometime in the future and almost half of the polled homeowners are planning on some type of renovation project.
So who is right? Every financial situation is unique, but this could be the best time for many renters to sit with a professional and discuss what it may take to purchase a home. With rent continuing
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Sources:
CoreLogic.com
BLS.gov
By: Jon Iacono