I know not everyone is in the same boat, but almost everyone knows someone that is renting. Let’s talk about this ridiculous rental market in Vancouver and Portland..
In the Columbian today (2/7/23) is an article about the struggles that tenants are facing in the rental market. This year isn’t looking to be any better. I hear this from my clients as well…. the struggle of rent increases in the hundreds of dollars EVERY year. It is crazy… and disheartening. One of my kids is paying $1800 a month for a ONE bedroom apartment! Mad respect to anyone renting right now because I am honestly not sure how you are making it. I am not sure how you are expected to absorb rent increases every year of $100 -$300 a month. It is insane.
How much of your monthly income goes to rent
Is it above 40%?
Did you know the average first time home buyer has a mortgage payment of about 40%-45% of their monthly income….but (and it is a BIG but with backup beeping) the difference is that your monthly mortgage won’t increase by hundreds of dollars a month next year. Buying a home is daunting, and stressful, and seems so far out of reach for most people.
I know… I remember. My husband and I took a chance in 2001 when we bought our first house…. a leap of faith. Our mortgage was almost $800 a month more than our rent had been. Did I mention it was a HUGE leap of faith? At the time so many people thought we were crazy for doing it. WE thought we might be crazy for doing it. However, we wanted to have a place where I could have a cat (or 2, or 3)… ok, maybe that what I wanted!
We both wanted somewhere where our children could know is home. I didn’t want to have to worry about a landlord selling the place we were living in from underneath us. Our original landlord passed away while we were living there, and there was some stress that the family would sell it, or raise the rents. Lucky for us, neither event happened, but they could have. Buying a home meant, to us, a place to put down roots. Financially, to us, having our own home also meant investing in ourselves instead of paying for someone else’s place. Home is a lot of things to a lot of people… to me, a home meant safety, security, a place to go that was mine. For my husband, a home meant different things… it meant stability, it meant knowing where you were going to go to after school/work every day, it meant having a place that our children felt that they belonged. What does ‘Home’ mean to you?
We lived in that home for over a decade. The mortgage, which seemed so high at the beginning, became easier and easier…and it wasn’t too long before the rent on the old place that we had rented was as much as the mortgage that we were paying on a home of our own!
When we purchased our home, we had zero idea what we were doing, or the questions to ask, and we trusted those around us to help us navigate the transaction. The lender did a great job, and actually went out of their way to get us into that home. There were some (many) things that we did, or didn’t do, that could have, would have, made our lives so much easier, and better.
When I talk about rent with people, I really struggle with the notion that someone is paying THAT much for something that isn’t theirs, and that they have no idea what could be charged next year. The uncertainty of renting, and the rent to income ratio that people are expected to have…. again, it is no wonder we have a floundering percentage of the population. How are you expected to live???? How are you expected to thrive? On the Facebook sites that I belong to, I read the saddest posts almost every day from people who are trying to figure out how to keep a roof over their family’s head and still be able to afford to feed them. The simple answer for many is just, “well, buy a home instead”….like you don’t want to, or haven’t dreamed of doing just that??? Ugh…
Benefits of Buying Your Own Home
Buying a home… having your OWN home… having that safety, security, stability, and financial achievement of owning your own home is a dream for so many people, but it’s hard to think about that when you’re barely keeping your head above water. I get it. I remember being there…. paying rent in two payments because I couldn’t do it in one. Choosing which utility we could pay that month, trying to buy some time to pay the rest. I remember writing a ‘hot check’ to just be able to get diapers at Cub Foods. For those too young to remember… a ‘hot check’ is when a person wrote a check when they didn’t have the money in the bank to cover that check. Cub Foods was pre-Winco. At the time we would just be praying our next paycheck would hit the account before that check did. I. Get. It…
So, how did we break out? Luck? Hard work? Taking a chance and praying like crazy? Manifesting a dream? Yeah… all of the above, and more.
First, we took a home buying education class, that was worthless as it didn’t really talk about anything that made any sense….and it was B.O.R.I.N.G. We felt that buying a home was further out of our reach than before. We went ‘house dreaming’… aka looking at houses, and new build home models. This was the first mistake we made… you don’t go grocery shopping without knowing how much you can spend, right? Definitely do not go house shopping without knowing how much you can get pre-approved for, or can afford. These are not the same two things. We did end up meeting with a lender that was able to explain the process so much better, and went over the funds involved. To move to a different home we were going to need the following…. first months rent, last months rent, security deposit, cleaning deposit, and some other BS deposits. OUCH. To buy a home we needed earnest money, inspection fee, appraisal fee, & closing costs for the loan… and the cost of all of this was pretty darn close to the first OUCH.
What? You’re kidding? What about our credit? We had declared bankruptcy about 2-3 years before this because we were poor and there were medical expenses and things that we could not keep up. We were 2 years past that bankruptcy though so we qualified for a FHA loan. With our credit (which was not great, and barely good, or ok), we even qualified for down payment assistance help.
Then, we got closing costs help from the seller we bought our home with. All of this meant that instead of OUCH, we only needed Ouch. Ouch is still a bunch, but crazy enough… what we needed to buy a home was LESS than what we needed to rent a different home. Say what?? Seriously… what in the actual craziness was that?
So, we took a leap of faith and went for it.
What am I getting to here?
We didn’t know what we didn’t know. Yes, we made mistakes, but I would do it all again. When we sold that first home, we took the equity and put it into our current home, as so many of us do. Our mortgage went up…again.. and I may have had a small (or not so small) panic attack thinking…”here we go again”. We have lived here 6 years now, and frankly, I could not afford to buy our home for what it is worth right now. Our mortgage, which again, felt really tight when we moved in, is now less than what many of my clients are paying for their rental homes. That really is the beauty of buying a home…. you are always going to be ahead of someone who doesn’t get out of the renting trap.
Not everyone has it easy. There are so many people who are working their butts off to get ahead, but feel that their dreams are moving further out of reach. I. Get. It.
I am not going to tell you that everyone can buy a home right now since I don’t sugar coat anything. Some (many) people will take the home buyer education class and be pleasantly surprised that, yes, YOU CAN buy a home. Will it be your ‘dream’ home? Your ‘perfect’ home? Yeah.. probably not, but it is a place to START. Our first home was not our ‘dream’ home, but it helped us to get where we are. It is better to start in something that you like (but isn’t ‘perfect’), than to continue to spend time in someone else’s home…..helping them make their dreams come true.
First…take the Home Buyer Education Class (www.LearningToBuyAHome.com), or a different class….maybe even take a few different classes to get different versions/information. My big number One thing… Ask Questions! Don’t feel pressured. Realize, and come to terms with that, yes, you will have to compromise….remember this is your FIRST home, not your last home….not matter how much you want it to be. Maybe you take the class, and talk to the lender….and you are not ready yet….that is ok. YET is the key word here. Just because you aren’t ready yet, doesn’t mean that you won’t be…someday. A good lender will continue to work with you, or be available for questions. A good Realtor is the same… you can always holler with questions. Remember that real estate is not about ‘sales’… real estate is about relationships.
For me, home meant having something that was mine where I could go and feel safe & secure. It was/is the place where I have raised my children. It is the place that our older kids know that they can always come back to as the door is always open to them, and I am happy to still smother them in my love and adoration. It is the place where our youngest can have friends over and feel safe and loved at. Home means so many things, and so many different things to so many people… maybe that is why I love what I do as much as I do… I want everyone to feel that. YOU make your home into what you want it to be because it is YOURS…not anyone else’s.
So, whether you want to use me as your Realtor (I would love to do so, by the way), or you already have someone else in mind (that is ok too!), please get some education. Whether this is your first home, or you already own a home, and are wanting to sell, and buy a new home (that is we did when we purchased our current home), there is so much more to it than you think. I’m happy to go over that all with you.