Buying or Renting-to-Own in 2016
If you’ve been considering buying a home in 2016, read on to learn the great reasons why 2016 is going to be an awesome year to buy your home. 2016 is looking to be the ideal year to move forward on that plan to buy or rent-to-own a home, especially for first time home buyers. Interest rates are still hovering at a very, very low rate which is expected to rise very soon. If you hurry you can still grab that low rate and lock it in. Still not convinced? Ok, aside from the low interest rates let’s take a look at some other reasons why 2016 is the year.
Renting vs. buying
In a growing number of cities across the US it’s actually more affordable to buy a home than it is to rent. The rental rates in recent years have blown up on a truly epic scale. In fact, it will be cheaper to buy than to rent in 58% of cities across the country. This disturbing trend is continuing and is expected to continue for the foreseeable future. The forces driving up rents are also driving up home prices, which make it even more important to act quickly and buy.
FHA loans are easier and cheaper than ever
These FHA loans are a wonderful and popular choice for first time home buyers. Why? Well, they provide a low down payment of just 3.5% to get things started and are not as restrictive on credit evaluations as a traditional loan may be given that you’ll only need a score of 580 to qualify. There is one caveat to a FHA loan in that you’ll have to pay a PMI (Mortgage Insurance Premium) until you’ve made the 20% down payment. But don’t fear, the cost of PMI’s are actually decreasing. In 2015, the Federal Housing Administration reduced the rate from 1.35% down to 0.85%.
Home prices are outpacing wages
Yep, you read that right. Home prices are actually outpacing wages. This means that if you’re in the lower income brackets and you continue to wait to buy a home you may actually get priced out of the possibility of buying home for a while. Yes, it’s true that home prices are starting to even out, but we’re still seeing growth at over 2.5% while wage growth is just above 2%.
It’s not too late to buy or even rent-to-own a home and there’s no way to be absolutely sure what the market will do beyond 2016. So take a look at our rent-to-own home listings today.