Don't get Caught in the Rental Trap!

Written by Posted On Friday, 14 April 2017 07:54

There are many benefits to homeownership. One of the top benefits is being able to protect yourself from rising rents by locking in your housing cost for the life of your mortgage.

Don’t Become Trapped 

Jonathan Smoke, Chief Economist at, reported on what he calls a “Rental Affordability Crisis.” He warns that,

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”

In the Joint Center for Housing Studies at Harvard University's 2016 State of the Nation’s Housing Report, they revealed that The number of cost-burdened households rose to 21.3 million. Even more troubling, the number with severe burdens (paying more than 50% of income for housing) jumped to a record 11.4 million. These households struggle to save for a rainy day and pay other bills, such as food and healthcare.

It’s Cheaper to Buy Than Rent 

In Smoke’s article, he went on to say,

“Housing is central to the health and well-being of our country and our local communities. In addition, this (rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit record to eventually buy a home.”

“While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters choosing to buy?”

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWire reported that analysts at Nomura believe:

"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.” (emphasis added)

Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. You can call me anytime!

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Kayla Ferris

Kayla is a REALTOR at the RE/MAX Elite office in Little Rock, AR. She has owned her own antique business for many years and gradually moved her business over to real estate. She is happily married and raising six children with her husband. Kayla primarily works in residential real estate and specializes in first time home buyers and sellers on the brink of foreclosure. Kayla purchased her first home in 2006 and was reluctant to foreclose on that home during the 07-08 housing market crash. She understands that excitment when buying a first home may sometimes cloud judgement to potential issues and the struggles to sell a home that you cannot afford.

"I feel that it is most important for me to EARN your trust. If you are looking to buy or sell real estate then let's sit down and talk specifics. After I understand the things that are important to you then I will provide you with information to help you make an informed decision. It would be an honor if you chose me to be your go-to resource in real estate. I can be reached at 501.502.0799"


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