A quick food for thought to the question…rent vs. buy. While mortgage rates remain at historical lows, rents are at historical highs and growing. Apartments know that lending standards are strict and inventory is tight, thus creating leverage to keep many families in the rental market.
A report from Zillow has revealed that while a renter spent about 24.4% of their income on rent from 1985 to 1999, this number increased to 29.5% last year and 30.2% this year. Los Angeles falls into a ballpark of its own as 49% of a resident’s monthly income is devoted to rent.
Moreover, as the cost of homeownership remains low due to low mortgage rates, renters are typically placed into 12 to 18 months contracts. At which point, many are obligated to pay larger sums of rent. The question then remains, which is better…paying a stable, low-cost mortgage or a higher and increasing rent?
Now…I know a lot of other factors go into play to this question of rent vs buy, but I wanted to quickly touch on this. If you are pondering rent vs own…let me know. We can conduct an analysis on both sides and see which is the better route to go. In all honesty, it’s not always homeownership…but the majority of times it is. Let’s take a look and see what’s best for you and your family.