Why Buying a Richmond Home Makes More Sense Than Renting

If you are renting or thinking of renting a home or apartment in Richmond, VA, you need to read this.

In the last year alone, Richmond area rents rose a whopping 36% on average.  That’s the 8th highest of all markets in the country. Here’s why buying a Richmond home could be a sound financial move.

For those who think they have no choice but to rent because they can’t afford to buy, we promise that there are alternatives to high down-payments.  And even though mortgage rates are higher than you may be used to, they are still far below averages over the past several decades.  Keep in mind that rent is a 100% interest rate and you are building no equity at all.  If buying a Richmond home, experts anticipate that you will continue to build equity on that purchase and you can always refinance if rates go down in the future.

If you are already renting and have roommates, consider buying and becoming a landlord yourself!  Rent those extra bedrooms out to friends and they can help you pay down that mortgage.

Check out this fantastic infographic.  It really puts all the numbers in perspective.  We’d love to help you run your own numbers to put your life-changing move into motion!

Why Buying a Home May Make More Sense Than Renting [INFOGRAPHIC] | MyKCM

Some Highlights

  • If you’re trying to decide whether to rent or buy a home, consider the advantages homeownership offers.
  • Buying a home can help you escape the cycle of rising rents, it’s a powerful wealth-building tool, and it’s typically considered a good hedge against inflation.
  • If you’re ready to take advantage of the benefits of homeownership, let’s connect to explore your options.
2 years ago
benefit of buying a home in Richmond

The True Strength of Homeowners Today

The main benefit of buying a home in Richmond is that our housing market is strong and building home equity is one of the best ways to build wealth.

Richmond homeowners are wondering what’s going on with the Real Estate market and how home values will hold up with the recent shift.  The article below gives a great overview of the benefit of buying a home in Richmond.

The True Strength of Homeowners Today | MyKCM

The real estate market is on just about everyone’s mind these days. That’s because the unsustainable market of the past two years is behind us, and the difference is being felt. The question now is, just how financially strong are homeowners throughout the country? Mortgage debt grew beyond 10 trillion dollars over the past year, and many called that a troubling sign when it happened for the first time in history.

Recently Odeta Kushi, Deputy Chief Economist at First American, answered that question when she said:

“U.S. households own $41 trillion in owner-occupied real estate, just over $12 trillion in debt, and the remaining ~$29 trillion in equity. The national “LTV” in Q2 2022 was 29.5%, the lowest since 1983.”

She continued on to say:

“Homeowners had an average of $320,000 in inflation-adjusted equity in their homes in Q2 2022, an all-time high.”

What Is LTV?

The term LTV refers to loan to value ratio. For more context, here’s how the Mortgage Reports defines it:

“Your ‘loan to value ratio’ (LTV) compares the size of your mortgage loan to the value of the home. For example: If your home is worth $200,000, and you have a mortgage for $180,000, your LTV ratio is 90% — because the loan makes up 90% of the total price.

You can also think about LTV in terms of your down payment. If you put 20% down, that means you’re borrowing 80% of the home’s value. So your LTV ratio is 80%.”

Why Is This Important?

This is yet another reason we won’t see the housing market crash. Home equity allows homeowners to be in control. For example, if someone did need to sell their home, they likely have the equity they need to be able to sell it and still put money in their pocket. This was not the case back in 2008, when many owed more on their homes than they were worth.

Bottom Line

Homeowners today have more financial strength than they have had since 1983. This is a combination of how homeowners have handled equity since the crash and rising home prices of the last two years. And this is yet another benefit of buying a home in Richmond and why homeownership in any market makes sense.

2 years ago