Dec 07

Renters Can Afford to Buy a Home

Renters Can Afford to Buy a Home

The number of renters who can afford a home has increased over the past two years, but achieving homeownership is still difficult for renters in saving up for a down payment, according to a recent post at the National Association of REALTORS®’ Economists’ Outlook blog. Thirty-eight percent of renters can afford to buy a home, but they may need 13 years of savings to make a 10% down payment, according to NAR’s analysis.

“As mortgage rates have fallen and incomes have increased, the fraction of renters who can afford to purchase a home has increased from 33% in 2018 to 38% as of 2020 Q3,” Scholastica “Gay” Cororaton, a research economist for NAR, writes at the blog.

Some of the metro areas seeing the highest percentage of renter households now able to afford to buy a home in the third quarter include Topeka, Kan. (64.5% of renter households can afford to buy a home); Waterloo-Cedar Falls, Iowa (63.3%); Elmira, N.Y. (62.4%); Fond du Lac, Wis. (60.9%); Decatur, Ill. (60.7%); Peoria, Ill. (60.7%); and Wichita Falls, Texas (59.5%).

While the home purchase has become more affordable, monthly mortgage payments and down payments have not. As of the third quarter, a renter with a family income of $49,242 or below would not be able to afford a typical single-family home valued at $313,500, according to NAR’s analysis. The mortgage payment would account for 29% of income, which is above the 25% threshold that most financial experts consider affordable.

Also, a renter will need about $30,000 for a 10% down payment, requiring an estimated 13 years of saving.

Still, the FHA and other lending programs offer 3% loans to first-time buyers. Several loan programs offer down payment assistance that real estate pros can share with their customers who are looking to buy but are unable to save for the down payment. Read more: Go in for the Assist

Source:
“Renter Affordability Statistics as of 2020 Q3,” National Association of REALTORS® Economists’ Outlook (Dec. 1, 2020)
©National Association of REALTORS®
Reprinted with permission

admin

For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both.

Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary.

Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that “perfect” property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently.

When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting – or exceeding – his clients’ expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame.

For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania… call Anthony DiDonato.