May 25, 2016 by Jeff Lowen
Peeps (is still cool to say that?) often ask me whether now is a good time to buy a home. What’dya think my answer is? Let me just say this, no one ever asks me when a good time to rent is. Hmmm… One thing is for sure, we want to make certain that everyone understands that today is NOT a good time to rent. Check it out:
The Census Bureau recently released their first quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:
Notice where this graph is going… Since 1988 – That was near the Mesozoic age, right?
A recent Wall Street Journal article reports that rents rose “faster last year than at any time since 2007, a boon for landlords but one that has stoked concerns about housing affordability for renters.”
The article also cited results from a recent Reis Inc. report which revealed that average effective rents rose 4.6% in 2015, the biggest gain since before the recession. Over the past 15 years, rents have risen at a rate of 2.7% annually.
Where are rents headed? The Superman direction… Up, up and away!
Jonathan Smoke, Chief Economist at realtor.com recently warned that:
“Low rental vacancies and a lack of new rental construction are pushing up rents, and we expect that they’ll outpace home price appreciation in the year ahead.”
The moral of the story…
NAR’s Chief Economist, Lawrence Yun had this to say in the latest Existing Home Sales Report:
“With rents steadily rising and average fixed rates well below 4 percent, qualified first-time buyers should be more active participants than what they are right now.”
One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are thinking at all about buying a home, let’s meet up to determine if where you are and how best to get you there!
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