Many Americans believe that buying a home is an important milestone in adulthood. Ideally, we grow up, go to college, start a career, build a long-lasting relationship, and then buy the house of our dreams that we’ll retire in. That’s a nice ideal to strive for, but times have changed and so have our housing trends.
Our real estate agents at Raleigh Cary Realty have observed the decline in homeownership nationally as some people are in a position that they have to rent. Although in the Triangle that has proven not to be the case as it is cheaper to own than rent. So, why exactly are some people passing on buying a home as rent prices continue to climb?
3 top reasons that people are not buying a home are:
- Can’t afford the down payment. Generally, people who can put down a 20% deposit will be offered the best interest rates. However, it’s unlikely that people will have that amount of money available at any time, and putting down less than 20% will cause interest rates to increase plus make mortgage insurance a necessity. Not to mention the high debt ratios that most younger people are already facing due to student loans. There are few Millennials who feel comfortable taking on so much more debt when their income may not be sufficient for all bills plus a mortgage. However, there are loan programs that require no to little as 3.5% down and even with the mortgage insurance tend to be less than rent payments in the Triangle. Make sure you contact Raleigh Cary Realty for more information as they work with many great mortgage specialists.
- They have bad credit. In this case, no credit is not good credit. In fact, bad credit will likely disqualify people from getting approved for any mortgaged. Credit scores below 620 will find some lenders willing to approve a loan, but they will come with hefty interest rates and other fees. Before mortgage hunting, work to improve your credit score as much as possible to increase approval odds. Once again, Raleigh Cary Realty works with mortgage specialists who will help people work on improving credit scores and let buyers know what to do in order to qualify.
- They change jobs too frequently. Contracting and short-term work assignments seem to be the new normal in our workforce. Many Americans love the flexibility that comes with renting since they can pick up and move whenever their job, or personal life, calls for it. It doesn’t make sense to buy and sell a new home every time they relocate, so they decide to rent instead for simplicity. If they work in the same career, know they will be in the same area and are salary employees they still could consider it.
Although it may seem that buying a home is more trouble than it’s worth, every person’s situation is different and it’s best to weigh all options before deciding to rent or buy. Contact our real estate agents at Raleigh Cary Realty today to learn more about the Triangle housing market!