If you’re renewing your lease or looking for a new place to rent this year, you will likely see a spike in what you pay each month. 2021 was a record year for rent growth, with it rising 17.8% nationally.* That is a huge increase considering annual rent growth between 2017–2019 averaged 2.3%.* With this rise in rent, you need to be more careful than ever not to get stuck in the rent trap.
What is the rent trap?
The rent trap is when you’re paying so much of your income in rent you struggle to save enough for a down payment to purchase a home. If a large portion of your income is going to your landlord, being able to buy a home can feel impossible, especially if you have other expenses like student loans or credit card debt. You could find yourself paying much more for rent than you would a mortgage.
How do I avoid the rent trap?
There’s good news: Saving enough to buy a home may not be as impossible as you think. A report from the Urban Institute found that three out of four people believe more than 5% is required for a down payment.** At LMCU, we offer financing with as little as 0–3% down,*** industry-low closing costs, and a member-only MaxMortgage discount that gets you an additional 0.125% off your interest rate.****
Leave the world of rising rent behind and connect with one of our expert loan officers today at LMCU.org/Mortgage or (844) 754-6280. Don’t forget to ask about our MaxMortgage discount.
*Apartment List National Rent Report. Apartment List, January 6, 2022.
**Barriers to Accessing Homeownership. Urban Institute, September 2018.
***For well-qualified borrowers.
****Mortgage payment must be an automatic payment that comes from an LMCU checking account to receive the MaxMortgage discount.