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Another Reason Renters Should Consider Buying Now

August 23, 2013

The housing market recovery is good news for homeowners, but it’s also good news for renters who have discovered over the last several years that renting can be an expensive proposition!

From 2008 to 2011, the cost to rent jumped by nearly 6%, but income fell by 3.2%* – quite a swing in finances.  The change in their finances was evaluated another way… 26% of working renters were spending more than half their income on rent in 2011 – an increase from 23% in 2008.  

According to Zillow, in about 2/3 of the country’s biggest cities, after three years, it costs less to own a home than to rent. Why is this, and how can you explain this to your customers?

There are several reasons:

1. Attitudes towards homeownership are changing. The number of homeowner households has been in decline since 2006 and renter households have been increasing. In 2012 alone, there were 1.4 million new rental households! First time buyers are holding off, nervous to make the commitment.

2. Foreclosures and short sales have moved many families from homeowners to renters, further boosting demand.

The result is that there are simply not enough rental units, which pushes up the cost as demand outstrips supply. This is an excellent opportunity for you to educate your first time homebuyers about the benefits of buying, even though rates have risen a bit. It’s still an excellent investment in the long run, and home prices are still a value.

*Center for Housing Policy

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