However, an increasing number of people across the country right now are finding out that from a financial standpoint, the idea of owning a home makes less and less sense. With the economy still in the doldrums and banks and lenders tightening up their requirements for a mortgage, many are realizing that renting is the way to go.

But why would people voluntarily pass up the American dream to stick it out in an apartment building? If one of the following six reasons sounds familiar, you may be a candidate for renting instead of owning a home.

Rents are cheaper The typical rent and home prices of metropolitan areas across the country vary widely. If you live in a community where the typical cost of renting is much lower than the cost of home ownership, it might be a logical move to stay in that apartment complex.

Money Magazine just published a great article showing where rents are relatively inexpensive compared to the average home price (found here). They did a simple ratio that compared the median home price in the area to the median rent. If you can find those figures for where you live, you can see how your town compares to the national average and other cities. Money found that Seattle, WA and Raleigh, NC were the best towns for renting while you should be looking to buy in Pittsburgh, PA and Los Angeles, CA.

You don’t have the down payment The days of creative financing and zero money down home loans are long gone. Back are the days of 20% down payments.

If you don’t have 20% of the purchase price ready to plunk down when you go to closing, the bank may not be willing to lend to you. Your best bet is to create a down payment fund and contribute to it regularly while living frugally in your apartment. Another option is to look at a more inexpensive house in your price range. Don’t go too cheap though. You’ll have to live in this house for the foreseeable future!

You think home prices will fall further This is a bit of a speculative play. Many believe that home prices have further to fall and buying a house now would essentially mean throwing money away.

If you’ve done your research and you’re convinced that now is not the time to buy (and there’s evidence that home prices likely will continue to fall for the remainder of the year), staying in your apartment and waiting for the housing market to bottom out completely could make sense.

You’re not settled A big factor in whether you want to rent or own a home is how long you plan on being in the home. If you believe that you might relocate for a new job in the next year or you might look for a new place after your wedding in the near future, you’re going to likely find yourself losing money in the deal.

You probably won’t make up even the closing costs of buying the house and the realtor’s commission for having to resell the house later will put you even further in the red.

You don’t want the hassle that comes with home ownership The actual cost of the house itself is just the beginning of the cost of owning a home. You’ve got closing costs, real estate taxes, a lawn mower, a snowblower (depending on where you live), appliances, and countless gadgets and tools you’ll need to take care of the little occurrences that will take place.

If you can’t picture yourself fixing any issues that arise in your house or spending the weekends outside cleaning the windows, mowing the lawn, and taking care of the bushes, you might be better off in an apartment where the landlord will take care of all that for you.

You can’t get a mortgage This will make a tough decision really easy. If banks aren’t willing to lend money to you because of your financial situation or your credit score, you’re probably out of luck.

The best things you can do in this situation are start saving money on a down payment no matter how much it is and work on improving your credit score. Once you feel you’ve made some progress, gather up your documentation and try again!

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of RPM Midlands or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.