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There are many benefits to homeownership. One of the top benefits is being able to protect yourself from rising
rents by locking in your housing cost for the life of your mortgage.

Don’t Become Trapped

Jonathan Smoke, Chief Economist at realtor.com, reported on what he calls a “Rental Affordability Crisis.” He warns
that,

“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll
outpace home price appreciation in the year ahead.”

In the Joint Center for Housing Studies at Harvard University’s 2016 State of the Nation’s
Housing Report
,
they revealed that The number of cost-burdened households rose to 21.3 million. Even more troubling, the number
with severe burdens (paying more than 50% of
income
for housing) jumped to a record 11.4 million.
These households
struggle to save for a rainy day and pay other bills, such as food and healthcare.

It’s Cheaper to Buy Than Rent

In Smoke’s article, he went on to say,

“Housing is central to the health and well-being of our country and our local communities. In addition, this
(rental affordability) crisis threatens the future value of owned housing, as the burdensome level of rents will
trap more aspiring owners into a vicious financial cycle in which they cannot save and build a solid credit
record to eventually buy a home.”

“While more than 85% of markets have burdensome rents today, it’s perplexing that in more than 75% of the
counties across the country, it is actually cheaper to buy than rent a home. So why aren’t those unhappy renters
choosing to buy?”

Know Your Options

Perhaps you have already saved enough to buy your first home. HousingWire reportedthat analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or
in how much they have saved for their down payment.

It’s that they think they’re not qualified or they
think
that they don’t have a big enough down payment.” (emphasis added)

Many first-time homebuyers who believe that they need a large down payment may be holding
themselves back
from their dream home. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment
in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out
if you are able. Let’s get together to determine if you can qualify for a mortgage now!
A recent report released by Down Payment Resource shows that 65% of first-time homebuyers purchased their homes with a
down payment of 6% or less in the month of January.

The trend continued through all buyers with a mortgage, as 62% made a down payment of less than 20%, which is
consistent with findings from December.

An article by DS News points
to the new wave of millennial homebuyers:

“It seems that the long-awaited influx of millennial home buyers is beginning. Ellie Mae reported that
mortgages to millennial borrowers for new home purchases continued their ascent in January, accounting for 84
percent of closed loans.”

Among millennials who purchased homes in January, FHA loans remained popular, making up 35% of all loans
closed. Ellie Mae’s Executive Vice President of Corporate
Strategy
Joe Tyrrell gave some insight into why:

“It is not surprising to see Millennial borrowers leverage FHA loans because they typically offer lower down
payments and lower average FICO score requirements than conventional loans. Across the board, we’re continuing
to see strong interest in homeownership from this younger generation.”

Bottom Line

If you are one of the many millennials who is debating a home purchase this year, let’s get together to help you
understand your options and set you on the path to preapproval.

We’re a 36 years young mortgage firm where EVERYONE MATTERS. Our goal is not to become the largest company, but the one with the greatest impact. To us, making a daily difference in the lives of our teammates, referral partners and our customers is what makes the work that we do so worthwhile and meaningful.