As we watch mortgage interest rates creep upward, it may be a good time to point out that other costs for renters are rising, too.
The Harvard Joint Center for Housing Studies just released a new report that says renters paid 31 percent more in rent between 2004 and 2012.
That’s a surprising 12 percentage points from a decade ago. One reason for the increase is that more than 27 percent of renters pay more than half their income on rent.
And half of U.S. renters pay more than 30 percent or more of their income on rent.
Thirty percent of gross income is what the Federal Housing Administration recommends for a monthly house payment.
So if you’re paying that much in rent, you might be better off buying a home.
Visit a trusted mortgage lender and find out how much home you can afford. Compare the monthly payment with what you’re paying in rent.
One thing you’ll find is that even if you pay a little more for your house payment you’re paying principal as well as interest and you can own your home in full one day.
Now may be the time. The latest 30-year fixed rate mortgage rate is 4.55 percent.
The benchmark 15-year mortgage is 3.62 percent.
And the five-year adjustable rate is 3.33 percent.
Don’t let rising interest rates make you hesitate. Benchmark rates are still close to historical lows.