Each month thousands of consumers buy a home for the first time. In February, 28 percent of existing home sales were to first-time home buyers, according to the National Association of Realtors.
Before taking that step from renter to homeowner, there's a lot to consider. The first is whether it actually makes sense to stop renting and start owning.
Depending on a wide set of variables, it might be more cost effective to rent than to own. But in recent years, the variables – in many housing markets at least – have swung toward ownership.
Interest rates remain near historic lows, making monthly mortgage payments more affordable. Because tougher mortgage restrictions have shut many people out of the housing market, there has been more demand for rentals, making renting expensive by comparison.
But that's not a given, so some analysis of rent vs. mortgage is required.
"Your first focus, no doubt, will be on those new mortgage payments, and reworking your monthly budget to carve out the needed funds," said Eleanor Blayney, [CFP®] Consumer Advocate for the Certified Financial Planner Board of Standards (CFP Board). Read more >
By Mark Huffman
April 11, 2014