The Cost of Renting vs. Buying in Hunterdon and Somerset Counties

The Cost of Renting vs. Buying in Hunterdon and Somerset Counties

The Cost of Renting vs. Buying [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Historically, the choice between renting or buying a home has been a tough decision.
  • Looking at the percentage of income needed to rent a median-priced home today (28.8%) vs. the percentage needed to buy a median-priced home (17.1%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year! 

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Renters Under 50 Want to Buy a Home in Hunterdon and Somerset Counties!

Renters Under 50 Want to Buy a Home in Hunterdon and Somerset Counties!

Every year, the New York Federal Reserve publishes the results of their Survey of Consumer Expectations (SCE). Each survey covers a wide range of topics including inflation, labor market, household finance, credit access and housing.

One of the many questions asked in the housing section of the survey was:

Assuming you had the financial resources to do so, would you like to OWN instead of RENT your primary residence?

Over three-quarters of respondents under the age of 50 said that they would prefer to own their home, rather than rent. While only 52.6% of those over 50 would prefer to own. The full breakdown can be found in the chart below.

Renters Under 50 Want to Buy a Home! | MyKCM

When renters were asked what the average probability of owning a primary residence at some point in their future was, 66.4% of those under 50 believed that they would eventually own their home, while only 23% of those over 50 did.

Renters Under 50 Want to Buy a Home! | MyKCM

Bottom Line

Many had wondered if young Americans had lost their desire to own a home, but for those renting now, that dream is still alive.

 


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Home Buying Myths Slayed

Home Buying Myths Slayed

Home Buying Myths Slayed [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The average down payment for first-time homebuyers is only 6%!
  • Despite mortgage interest rates being over 4%, rates are still below historic numbers.
  • 88% of property managers raised their rents in the last 12 months!
  • The credit score requirements for mortgage approval continue to fall.

     


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Millennials will spend 45% of income on rent before age 30

Millennials will spend 45% of income on rent before age 30

Most rent burdened generation

Reposted from Housingwire.com

As rent prices continue to rise, a new study shows Millennials are paying about 45% of their total income toward rent, and pay out close to $100,000 toward rent before they turn 30.

Analyzing U.S. Census Bureau data going back as far as 1974, a new study from RentCafé found that Millennials have been the hardest generation for those ages 22 to 30. And the future does not look bright for Generation Z.

As it turns out, Millennials pay about $92,600 in rent by the time they turn 30. While they may earn more in income compared to previous generations, they also have to spend more on rent, the study showed.

During that same age span, from 22 to 30, Gen Xers paid an average $82,200 and Baby Boomers paid about $71,000 on total earned income of $202,100 and $195,700, respectively.

While Baby Boomers paid just 36% of their income toward rent while in their 20s, Gen Xers paid 41% and Millennials now pay 45% of their monthly income toward rent.

If this trend continues, Generation Z is expected to have to pay around $102,000 in rent during their 20s

Some of this trend can be attributed to many Millennials preferring to live in downtown urban areas paying rent that they know is way too high, rather than buy a home.

Also, student debt is holding back many Millennials from buying a home, forcing them to pay higher rent prices. About 50% of Millennials who have student debt said they are uncomfortable taking on a mortgage. What’s more, this group was less likely to believe they could even qualify for a mortgage, according to data from the National Association of Realtors.

But a survey from Zillow shows that while mortgage payments are more affordable on average than monthly rent payments, renters are struggling to buy a home due to perceived down-payment barriers.

In 2017, rent increased 3.1% with higher increases seen in certain major metro areas, according to data from Trulia. Overall, rent has increased 19.6% since the end of 2012.

 


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NOT Owning Your Home in Hunterdon and Somerset County Can Cost You a Lot of Money!

NOT Owning Your Home in Hunterdon and Somerset County 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!!

Bottom Line

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

 


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