Dear Future American Homeowner,
I write this letter to you to encourage you to save your money for the purchase of a home. I have said this before, but maybe you didn’t hear me the first time. It has come to my attention that now 58% of you don’t have plans to purchase a home. What concerns me most is that this figure has increased, up from 54% just in February, according to Freddie.
Unfortunately, after the recession back in 2008/9, many families, maybe even yourself, lost homes to foreclosures and tough credit made it difficult to buy homes. I am aware that rents increased by double-digits percentages in many popular cities and that some rents increased so much that a large portion of families couldn’t even afford their rent. These statistics may not seem very positive, but you can make a difference. Maybe holding off on the morning coffee at Starbucks and making it yourself. Maybe eating out less and cooking for yourself more. These are just some examples of how to cut costs and save for your own home.
In the past five years, before the recent rate increase, home prices were lower, and it was the perfect time for those who could qualify for a mortgage. While the rental supply has hit a three-decade high, home prices are increasing, and mortgage rates have risen almost a whole percentage point since January, there are still ways for you to own a home. And while the rising-rate trend may continue, there are a few things within your control, your credit rating and your down payment. The better the score, the lower the rate. It’s time to get creative, surround yourself with people who can guide you in the right direction towards home ownership.
Understand that if more people continue to rent, this will not help to decrease rents, but rather cause them to begin to rise, and not slowly, either.
I also know that you are seeking the best home for yourself, and while that’s not a bad thing, it’s not realistic. Be practical. Searching for your dream home will put you into dream debt. So, start with a modest home. This home may not be what you expect, but it sure beats getting the Landlord rich.
So, do you want to invest in yourself or your Landlord’s fortune?
Khila L. Khani, Esq.
Your Florida Real Estate Attorney