is buying a home more affordable than renting?
Over the past several years, rental prices have been stable even though renter's incomes have been increasing nationally. Recently, according to Zillow, rents across the nation have increased by 2.6% since last December. The national median rent price is now $1,439, which is the highest ever recorded by Zillow. It appears that rental growth is beginning to catch up with income growth, which is not good news for renters. Here in Shelton, the median rent price in 2017 was slightly higher than the national median at $1,550.
Buying a home in Shelton today could lower monthly payments. Let's take an example: A buyer purchases a home in Shelton for $200,000 using an FHA loan. The buyer will need to make a down payment of 3.5% or $7,000. (which is only $2,350. more than they would need to pay first month's rent plus two month's security at the median rental rate of $1,550 to move in to a rental). For this $200,000 home, the buyer's monthly payment's would be approximately $1,341./month at an interest rate of 4% and includes taxes, insurance and MIP (Mortgage Interest Payment). Of course, the buyer would also have to come up with the closing cost expenses that can range from 2 to 5% of the sale price. The buyer can always include the closing costs into their mortgage by asking the seller for a credit at closing toward closing costs. By doing so, this would increase the monthly payments by approximately $67. and also increase the down payment by $350.
The potential for saving money by purchasing a home is real and may be a better option for most renter's with good credit. Those without good credit, may not qualify for a mortgage and will have to keep renting. However, there are definitely ways to increase your credit score. Please contact me to find out how.
The other challenge we are seeing here in Shelton is the shortage of inventory of homes for sale. This is especially true for homes in the price range under $300,000. So, be sure to start your search for a new home as early as possible.
To find a home in Shelton, click the link below:
SHELTON HOMES FOR SALE