Great News for Renters Who Want to Buy a Home

Great News for Renters Who Want to Buy a Home

Rents in the United States have been skyrocketing since 2012. This has caused many renters to face a tremendous burden when juggling their housing expenses and the desire to save for a down payment at the same time. The recent stabilization of rental prices provides a great opportunity for renters to save more of their current income to put toward the purchase of a home.

Just last week the Joint Center of Housing Studies of Harvard University released the America’s Rental Housing 2020 Report. The results explain the financial challenges renters are experiencing today,

“Despite slowing demand and the continued strength of new construction, rental markets in the U.S. remain extremely tight. Vacancy rates are at decades-long lows, pushing up rents far faster than incomes. Both the number and share of cost-burdened renters are again on the rise, especially among middle-income households.”

According to the most recent Zillow Rent Index, which measures the estimated market-rate rent for all homes and apartments, the typical U.S. rent now stands at $1,600 per month. Here is a graph of how the index’s median rent values have climbed over the last eight years:Great News for Renters Who Want to Buy a Home | Keeping Current Matters

Is Good News Coming?

There seems, however, to be some good news on the horizon. Four of the major rent indices are all reporting that rents are finally beginning to stabilize in all rental categories:

1. The Zillow Rent Index, linked above, only rose 2.6% over the last year.

2. RENTCafé’s research team also analyzes rent data across the 260 largest cities in the United States. The data on average rents comes directly from competitively rented, large-scale, multi-family properties (50+ units in size). Their 2019 Year-End Rent Report shows only a 3% increase in rents from last year, the slowest annual rise over the past 17 months.

3. The CoreLogic Single Family Rent Index reports on single-family only rental listing data in the Multiple Listing Service. Their latest index shows how overall year-over-year rent price increases have slowed since February 2016, when they peaked at 4.2%. They have stabilized around 3% since early 2019.

4. The Apartment List National Rent Report uses median rent statistics for recent movers taken from the Census Bureau American Community Survey. The 2020 report reveals that the year-over-year growth rate of 1.6% matches the rate at this time last year; it is just ahead of the 1.5% rate from January 2016. They also explain how “the past five years also saw stretches of notably faster rent growth. Year-over-year rent growth stood at 2.6% in January 2018, and in January 2016 it was 3.3%, more than double the current rate.”

It seems tenants are getting a breather from the rapid rent increases that have plagued them for almost a decade.

Bottom Line

Rental expenses are beginning to moderate, and at the same time, average wages are increasing. That power combination may allow renters who dream of buying a home of their own an opportunity to save more money to put toward a down payment. That’s sensational news!

https://www.keepingcurrentmatters.com/2020/02/06/great-news-for-renters-who-want-to-buy-a-home/

Posted on February 16, 2020 at 7:00 am
Tammy Fisher | Category: Buying a Home, Loveland Real Estate, Northern Colorado Real Estate, Owning a Home | Tagged , , , ,

Year-Over-Year Rental Prices on the Rise

Year-Over-Year Rental Prices on the Rise

Looking ahead, 2020 is projected to be a strong year for homeownership. According to the Freddie Mac Forecast,

“We expect rates to remain low, falling to a yearly average of 3.8% in 2020.”

If you’re currently renting, 2020 may be a great time to think about making a jump into homeownership while mortgage rates are low.

As noted in the National Rent Report,

the national rent index increased by 1.4 percent year-over-year.”

With average rents on the rise, this year-over-year increase may not sound like much, but it can add up – fast. The math on how much extra it will cost you over time surely doesn’t lie.

Here’s an example: On a $1,500 rental payment, an increase of 1.4% adds an additional $21 dollars per month to your payment. When multiplied by the twelve months in a year, it’s a $252 overall annual increase. The price continues to multiply when you rent year after year, as rental prices rise.

History shows how average rental prices have been increasing each year, and there doesn’t seem to be much end in sight. Here’s a look at how rents have grown since 2012 alone:Year-Over-Year Rental Prices on the Rise | Keeping Current MattersWhy not lock down your monthly housing expense, and at the same time build additional net worth for you and your family? If you’re thinking about buying a home, consider the financial benefits of what homeownership can do for you, especially while the market conditions are strong and current mortgage rates are low.

Bottom Line

With average rents continuing to rise, now may be a great time to stabilize your monthly payment by becoming a homeowner and locking into a low mortgage rate. Reach out to a local real estate professional to learn how taking advantage of the current market conditions might work for you.

https://www.keepingcurrentmatters.com/2019/12/26/year-over-year-rental-prices-on-the-rise/

Posted on January 20, 2020 at 7:00 am
Tammy Fisher | Category: Loveland Real Estate, Northern Colorado Real Estate, Real Estate Market, Uncategorized | Tagged , , ,