An UrbanTurf report states that it is 28% cheaper to buy than to rent a comparable home in the long-term here.Ever since the U.S. housing crisis, homeownership has waned and the rental market has exploded. Subsequently, the number of rental units hasn’t kept pace with the demand, especially in popular millennialareas such as D.C. This has led the rents in D.C. to rise faster than any other consumer category and D.C. is now the fifth most costly place to rent in America. Even those with solid salaries are finding their expenditures on housing to be more than the recommended 30% threshold, states aSmartAsset report. In other words, renters in the District are paying heavily for homes that don’tbuild equity, don’t offer tax advantages and don’t provide protection against payment increases each year.
Investing one’s savings and taking on the long-term financial obligation of a home is daunting. But the payoff is extremely lucrative. Homeowners are 38 times wealthier than renters, states a CNBC report. 49% of millennials say that buying a home will most likely be their next step, says a survey by Fannie Mae. But the same survey states that 57% of young renters cited financial reasons for not buying a home. Poor credit, high down payment costs, a low monthly income, and too much existing debt were cited as the main obstacles.
While today’s homeownership rate among 25-40 year-olds is at a historic low (18%), 80% of millennial respondents to a Business Insider survey said they want to buy a home and 52% said that renting is a waste of money. Why is there such a disparity? Maybe because millennials have been discouraged from buying homes by misinformation and mythology such as: renting is cheaper;20% down is necessary; a perfect credit score is required to get loan; it’s advisable to pay off student loans first, and others.
OK, so you know that buying a home is a smart move, that you’re throwing your money away on rent, that the DC area is a great place to make an investment, etc., But still, it just seems so complicated and so scary to take what seems like such a big, permanent step! Well, the great news is that it really isn’t that complicated (if you have the right realtor to guide you) and it’s very unlikely to be a permanent decision (unless you keep your first home as a revenue-generating rental property when you purchase your second home!).
The D.C. Metro area has some of the coolest places for millennials to live in the entire country and each is intriguingly different from the other. What they have in common,however, is their ethnic diversity, great restaurants and retail, vibrant nightlife and nearby Metro stops. And they’re the ideal neighborhoods in which to purchase a home because the property values will either increase at best, or remain stable at worst.