Renew Your Lease or Buy a Condominium?

Zumper, a national aparatment rental site, recently released its November 2014 rental report naming the top 10 priciest rental marekts in the U.S.  Topping the list is San Francisco where the median monthly rent for a one bedroom apartment is $3,350 followed closely by New York at $3,000/month.  Seattle/Bellevue is ranked at #8 at $1,610/month for a one bedroom apartment.  

As a comparison, purchasing a $350,000 condominium with 10% down would have a monthly PITI (principal, interest, taxes and insurance) payment of $1,778.  With a down payment of less than 20% PMI (private mortgage insurance) needs to be figured into the total monthly expense for a period of time (approximately $250) but PMI can be pre-paid at closing and avoided.  For a difference of just $168/month a renter could own a 1 or 2 bedroom condominium and begin establishing equity and wealth.  After the first of the year Fannie Mae and Freddie Mac will be offering conventional loan programs with just 3% down.  For renters who have sufficient income to qualify for a loan but perhaps don't have a 10% or 20% down payment, this is a game changer and presents an excellent opportunity to purchase a first home.