With a 15% increase in median home prices in Connecticut in 2020, it may seem like homeownership is out of reach.
But with mortgage rates remaining low, it’s more affordable than you think.
According to ATTOM Data Solution’s 2021 Rental Affordability Report, it is more affordable to own a home than to rent in 63% of counties across the United States.
As far as Connecticut is concerned, the report shows that it is more affordable to buy than rent in New Haven, Middlesex, New London, Hartford, and Tolland Counties.
As with any significant decision, you must weigh many factors to determine if now is the right time to buy. Keep reading for 5 factors to consider before buying!
Your Current Financial Status
Start by considering what your current income is, compared to your current expenses. Take into account all loans and credit card debt. If your debts are high, develop a plan to pay them off and start saving for homeownership. In today’s seller’s market, most buyers will need some savings for a downpayment and closing costs.
Meet with a mortgage lender to learn what type of loan you qualify for, and determine what you are comfortable paying every month for housing. This step will help you create a top budget when you start your home search.
Rent Prices in Your Locations
Do some online research, comparing rent prices in your desired location. Compare these numbers to a monthly mortgage payment at your price point. You can use online mortgage calculators to help you determine monthly costs after buying a home (don’t forget to include mortgage insurance and property taxes!).
It’s essential to factor in future plans. If you plan on moving in 2-3 years, it may not be in your best interest to buy right now. However, if you plan on staying in the same home for the next several years, buying could be a better option.
Equity Gained through Homeownership
Homeowners gained equity in 2020, and home values are expected to rise again in 2021. This is something you will never see as a renter, and is important to factor in!
Do you have questions about buying in today’s market?