Why renters are the next mortgage crisis : Could renters possibly be part of the reason for a mortgage crisis?
With mortgage rates low, housing prices going down it makes purchasing a home very affordable if you have the ability. That means stable income, stable employment, money saved up and a good debt to income ratio. If you have all of these under control and are still renting.
We understand that now might not be the "perfect" timing for alot of consumers based on personal issues but if you are capable of purchasing a home then what are you waiting for?
Houselogic gives a great examples of what this means :
Renter : $1500 Rent (3.3% inflation yearly) = $900,000 for housing over 30 years
Homeowner : $1500 mortgage payment = $540,000 on $300,000 home. But also assuming 1% appreciation the homeowner will also have a paid for house and approximately $100,000 in added equity.
Conclusion : The renter has paid twice as much as homeowner for those 30 years and given up approximately $400,000 in assets.