Many potential homeowners think purchasing property is out of their reach. According to the National Association of Realtor’s 2018 Aspiring Home Buyers Profile, 56% of non-owners claim an inability to afford a home as the reason they don’t currently own property.
But in today’s market, is that assumption wrong? And are people who are able to afford a home throwing their money away on renting?
In most cases, yes.
According to a recent study by Zillow, renting is actually more expensive than owning in most metro markets across the United States—by a long shot. According to the study, rent eats up nearly twice as much household income as owning, with renters paying an average of 29.1% of their income in rent, while homeowners only pay an average of 15.4% towards their mortgages.
If you’re holding off on buying a property because you don’t think you can afford it, it’s time to rethink that assumption. Owning a home may be more affordable than you think. And with rental prices shooting up across the country, you may spend less on your mortgage than you are now. Plus, you’ll be building your wealth in the process, unlike with renting.