Mortgage rates are at historical lows, but in a market like Washington, D.C., sometimes renting can prove a better option for residents.
Shannon Page is building her first home in D.C. After years of renting in the market, she and her family decided to go for it.
"Rent is so high in D.C. Believe it or not, we get a lot more space and pay less money than we would paying rent," Page said.
But the American dream of purchasing a home may soon become an anomoly.
A report by the Urban Institute shows home ownership rates in the U.S. falling through 2030, and that means more renters - lots of renters.
RealtyTrac, a company that collects U.S. real estate data, says you should not spend more than 20 percent of your income on housing.
For example, if you live in Arlington County, purchasing a home would eat up 36 percent of your annual income. That number soars to 50 percent in the District. Which is why in both areas, RealtyTrac recommends renting.
But if you go to Prince William or Prince George's counties, where it takes just slightly more than 20 percent of your annual income to buy a home, RealtyTrac recommends buying.
|State||County||Gross Avg. Weekly |
Wage, Q3 2014
|% of Income |
That Would Go to Mortgage
|Rent or Buy?|
However, some experts say current low mortgage rates may be reason enough to take a hard look at your finances.
"A 30-year fixed rate mortgage rate is slightly above 4 percent. I'm old enough to remember when my wife and I bought our first home her in the D.C. area. They were double digit morgage rates," said Bankrate's Mark Hamrick.
Hamrick says depending on the economy and "The Fed," interest rates will likely climb slightly by September.