Home loan mortgages in Miami are still twice as affordable as rents in 2014. We've been seeing this prediction throughout the year but the differences are still awe inspiring. Renting in Miami takes a lot more of people's income than owning. According to a recent article by Zillow Analysis the median rent in Miami took up about 44% of the areas median income in the third quarter of 2014. That 63% above the historical average of just 27%; More than double what Miami residents typically devote to mortgages, only 20% or less.
National averages show 15% of income share for mortgages which contrasts greatly with the 30% for rental payments. This inequality could also result in an unequal housing market. As many real estate agents have said for several months that homeownership is more affordable than renting an encouraging people to save money, benefit the economy and eventually by real estate rather than rent and pay some other homeowners mortgage.
However, with all this being said, potential homebuyers should realize that even though it is more affordable it may not be any easier to get a mortgage. Lending standards are tighter than ever and many lenders are requiring at least a 20% down payment for conventional loans. This can be a very big chunk out of first-time homeowner’s home purchasing nest egg. This alone may be causing more rental properties since first-time homebuyers are having a difficult time coming up with that down payment.
The rental stock is currently low in the Miami area so rents have soared not just here but all over the country. Rental construction has also skyrocketed in response to the high demand of low inventory but given the extended timelines required to complete these multifamily apartment or condominium units it can increase what is currently available.
In conclusion, even though mortgage payments it might be extremely reasonable and rates still at all-time lows, home prices may still be more expensive overall. Home ownership could simply be inaccessible for low to moderate incomes especially for the Miami market, which focuses mainly on luxury condos and waterfront properties. [Source]
If you've been considering purchasing a home and are tired of paying your landlords mortgage, give me a call and let's see how affordable buying a home of your own could actually be.