1. Rents are increasing. This is economics 101. Supply and Demand. As families lose their homes to foreclosure, they cannot get loans and so they have to rent. Thus: Increased Demand.
2. First time buyers are at historic highs and builders in San Diego battle regulation and shortage of land. Both of these factors limit the supply of rental homes.
3. Thus increased demand and limited supply. Result: Rapidly rising rents. Statistics indicate that rents rose by 4-8% last year and are expected to do the same this year.
4. Interest rates are at a 40 year low. These rates are unheard of (6-7% is a ‘normal’ rate) and they will not last forever. As the economy improves inflation will follow and so will interest rates. If you can lock in these rates now your mortgage payment will not increase for the next 30 years.
5. Essentially the outflow of cash for housing (rent = mortgage) will remain fixed with a mortgage and will increase if you rent.
6. Housing is having a 50% off sale. This will not last. Why? See 1 and 2 above. It does not take a rocket scientist to figure out that savvy real estate investors see this as clearly as I do. They can very quickly do the calculation and see that if they buy a home and put a renter into it, they will IMMEDIATELY make money (just a little now, but lots more later), and in less than no time have their tenant pay off their mortgage and earn all sorts of cash flow, let alone have an asset that has appreciated along with inflation (at least). Housing will not just continue to fall. The rule of arbitrage in the capitalistic market will prop up prices. Investors will fill the gap as rents increase and mortgages stay the same.
7. The mortgage Interest Deduction (MID) makes housing even cheaper. Most people do not buy based on price but on cash flow (it is a secondary issue in my mind, important but not as much as cash flow). If you buy right, your cost of living in a home can be LESS than renting.
8. Inflation. Historically, rents keep pace with inflation (as do the values of real estate). So while your cost of rent goes up with inflation, your mortgage actually gets cheaper! WHAT! Yes your fixed cost ‘feels’ like less because of inflation. Imagine if you could buy a gallon of milk at the same price it is now for the next 30 years (or as much as it was 30 years ago). You would buy as many as you could. THAT’s how a mortgage works. You fix the cost of housing for the next 30 years…and then it becomes FREE! What a deal.
9. Lack of a Down Payment or Poor Credit: If you do not have either, this is no longer an excuse. The government, via the FHA loan program, is making it possible to buy homes with as little as 3% down (that’s $9,000 on a $300,000 home). And credit is not as important in most cases. You do need a job though, and I think most readers of this article have one of those.

With this backdrop I DO NOT understand why more renters are not examining the option of buying.

Allow me to do a No Cost, No obligation evaluation for you.  My lender and I will look at your situation and do a side-by-side comparison of renting vs. owning for you. Then YOU decide.

PLEASE do not let this opportunity pass you by without at least examining the possibility.  Remember you soon forget the mistakes you make but you always regret the opportunities you missed.

Contact me at FrankAtrash@gmail.com or at 619-739-0008