With apartment rent hikes of 15% compared to just 12 months ago, and the national monthly rental average now sitting at $2000, there has never been a stronger incentive for first-home buyers to try and buy a property.
A new report from brokerage Redfin revealed that average rental increases of 30% have been registered in cities like Austin, Seattle and Cincinnati. In Los Angeles, renters are paying out $3,400 a month for a roof over their heads.
Even if you’ve never aspired to own property, financial considerations now may make it a more tempting alternative.
These are some of the things to consider if you are looking to buy your first home.
It’s all about you
Deciding whether to purchase or rent must align with your personal preferences and circumstances. You must consider whether you can put together a deposit, along with your current job stability. An assessment of your own situation is always the primary consideration.
Do you need help?
Many first-time buyers break into the market with financial assistance or a loan guarantee from family. Others use loan conditions offered by the Federal Housing Administration and Veteran Affairs. (You need to qualify to receive their assistance).
Think long-term
Buying property is not a quick fix, which may sound obvious. But you must see this as a multi-year play. Even if you bought today and the value fell tomorrow, that shouldn’t matter if you held the property for several years, as history suggests its value will more than recover. So, don’t fixate on the immediate ups and downs of the market.
Lender conditions
Have you spoken with a mortgage lender or broker? If not, it’s worth having a conversation to see what they can do for you. If you don’t ask, you don’t get.
Higher rates
Inflation is pushing mortgage costs higher as the Federal Reserve tries to dampen the economy and prices. That means some property values are dipping. Sellers are certainly more willing to negotiate than 12 months ago. So, not everything is against you.