There are many opinions about the real estate industry and some inquire whether now is a good time to buy. The bottom line is everyone needs a place to live, renting or owning. And if renting becomes just as costly as buying, without some of the financial benefits, the question then becomes will you turn to buying?
According to the Real Estate Economy Watch, the rate of rent growth is significantly higher so far this year than it was this time in 2010. It is currently at a 5.17 annualized rate compared to 4.72 percent at this time last year. And, assuming effective rent grows at the same rate in the next four months as it did in 2010, the full-year total would fall just below the historic highs of 2000 (6.18 percent) and 2005 (5.81 percent)[1]. Although effective rents have increased 9.96 overall since December 2009, the past 20 months have shown effective rents differ by property class. Class A properties have increased 11.54 percent, Class B properties have increased 10.44 percent and Class C properties have increased only 6.74. Some of the top markets for annual effective rent growth are in Northern California, Texas, Colorado.
But as we questioned in our Home Sales Jump, But What Does that Mean for Real Estate Market article recently, home buyers are still struggling against a very tight credit market. So while only 23 percent of renters living in single family homes-where more than half the nation’s renters live today–believe that renting makes more sense than buying a home[2], the difficulty of getting financing will hold the other 77 percent back. According to the Real Estate Economy Watch, seventy-three percent of single-family renters say it would be difficult for them to get a home mortgage, with 33 percent citing their credit history as the biggest obstacle to getting financing.
“Survey data make clear the relationship between home purchase demand and concerns about the stability of employment. Dissatisfaction about the direction of the economy and related employment fears are damping demand to buy homes and slowing the recovery. People who believe owning is a better deal than renting are nonetheless planning to rent, at least until things improve it would seem,” said Doug Duncan, vice president and chief economist of Fannie Mae.
It appears that the debate whether to rent or buy is still a heated one and its now become much more than the traditional To Buy or Not To Buy type questions. So we will ask you, will you turn to buying with the increase in rental pricing?
October 17th, 2011 by Gillian Luce (Homes.com)
According to the Real Estate Economy Watch, the rate of rent growth is significantly higher so far this year than it was this time in 2010. It is currently at a 5.17 annualized rate compared to 4.72 percent at this time last year. And, assuming effective rent grows at the same rate in the next four months as it did in 2010, the full-year total would fall just below the historic highs of 2000 (6.18 percent) and 2005 (5.81 percent)[1]. Although effective rents have increased 9.96 overall since December 2009, the past 20 months have shown effective rents differ by property class. Class A properties have increased 11.54 percent, Class B properties have increased 10.44 percent and Class C properties have increased only 6.74. Some of the top markets for annual effective rent growth are in Northern California, Texas, Colorado.
But as we questioned in our Home Sales Jump, But What Does that Mean for Real Estate Market article recently, home buyers are still struggling against a very tight credit market. So while only 23 percent of renters living in single family homes-where more than half the nation’s renters live today–believe that renting makes more sense than buying a home[2], the difficulty of getting financing will hold the other 77 percent back. According to the Real Estate Economy Watch, seventy-three percent of single-family renters say it would be difficult for them to get a home mortgage, with 33 percent citing their credit history as the biggest obstacle to getting financing.
“Survey data make clear the relationship between home purchase demand and concerns about the stability of employment. Dissatisfaction about the direction of the economy and related employment fears are damping demand to buy homes and slowing the recovery. People who believe owning is a better deal than renting are nonetheless planning to rent, at least until things improve it would seem,” said Doug Duncan, vice president and chief economist of Fannie Mae.
It appears that the debate whether to rent or buy is still a heated one and its now become much more than the traditional To Buy or Not To Buy type questions. So we will ask you, will you turn to buying with the increase in rental pricing?
October 17th, 2011 by Gillian Luce (Homes.com)
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