Deciding between renting and buying a home is a major financial decision that requires careful consideration of the pros and cons. While owning a home is often considered a part of the American dream, it may not be the right choice for everyone. Renting offers flexibility, minimal responsibility for maintenance and repairs, and the ability to easily move, but it may not provide long-term financial benefits. Buying, on the other hand, can build equity and provide stability, but it also comes with additional expenses and responsibilities. Ultimately, the decision between renting and buying should be based on personal financial goals, lifestyle preferences, and long-term plans.

When Americans consider whether to rent or buy a home, affordability is top-of-mind. Perceptions of affordability, however, don’t meet reality, according to a recent survey by Freddie Mac.

“More than 80% of renters now view renting as more affordable than homeownership,” according to the survey.

They’re wrong

“Owning the median-priced home is more affordable than the average rent on a three-bedroom home in 58% of the country,” says CNBC’s Michelle Fox, citing an ATTOM Data report from January.

The Freddie Mac survey finds that nearly 35% of renters reported that their rent payment consumes more than one-third of their income. Homeowners? Only 25% of them spend that much of their income on their mortgage.

Then why don’t they ditch the landlord and buy a home?

The quick answer to that one is, again, a perception that doesn’t jive with reality.

Nearly 90% of renters named the down payment and closing costs as major obstacles in their path to homeownership.

This perception is based, no doubt, on the many online articles erroneously claiming that a homebuyer needs 20% of the loan amount as a down payment.

While it’s financially better to have a large down payment, it is by no means a hard and fast rule set by lenders. Many offer mortgages with as little as 3.5 percent down and, believe it or not, there are zero-down options as well.

Still seems like too much money?

There are more than 2,000 down payment/closing cost assistance programs, nationwide. Some offer the help as a grant while others offer no-to-low-interest loans. Your lender can help you find the ideal program to fit your needs.

You’ll be glad you did it

“There is a reason so many Americans choose to develop their net worth through homeownership,” according to Matthew Desmond of the New York Times Magazine. “It is a proven wealth builder and savings compeller.”

When renters write their rent check every month, they’re helping their landlord to build wealth. The mortgage check that homeowners write each month? It goes toward building their own wealth.

And the proof is in the numbers. Not only do homeowners spend a smaller percentage of their income on housing each month, their net worth is, on average, $195,400 which is 36 times that of the average renter’s net worth ($5,400).

Yes, there are challenges for many renters who would like to buy a home. But they are far from insurmountable. You may be surprised what is possible with the right mortgage/real estate team to back you up.

Real estate can be a complex and ever-changing industry, which is why the team at www.homesinsdcounty.com  is committed to staying informed and up-to-date on the latest market trends and innovative strategies. Whether you’re looking to buy your dream home or sell for top dollar, we can provide you with the knowledge, expertise, and support you need to achieve your goals. Don’t navigate the maze alone – give us a call today and let us guide you every step of the way.

If you have friends, family or neighbors who are considering buying or selling a home, we at HomesinSDCounty would love to assist them. And please don’t hesitate to call me if there’s anything we can do for you.

If you’re looking to buy or sell a property connect with us today!