Get Out of the Rent Race: 4 Reasons from Recent Headlines
Feel like it’s been getting more and more expensive to be a renter? Don’t worry, you’re not crazy — it’s true. The latest headlines have been showing the costs of rent keep rising, while home buying is getting easier and more affordable.
If you think you might be ready to break your lease and buy a house, here are some bits of info to keep in mind:
- Rents in the U.S. are at all-time highs. The national average rent hit an all-time high in July 2018, reaching $1,409, according to RentCafe. Rents also jumped in 88% of the nation’s biggest cities that month. The average millennial will now spend nearly $100,000 in rent by the time they’re 30 — so why are so many staying in the rent race?
- As prices go up, rental properties keep getting older. It’d be one thing if those record-setting rents came with amazing amenities, but that’s not what’s happening. In fact, only 9% of rental units were built in the last decade. A whopping 66% of rental properties are over 30 years old — and for units built before 1960? Rents have jumped 21.4% since 2000.“We find that since 2000, median rents have been growing fastest among the oldest cohorts of rentals, a troubling sign for the millions of renters across the nation who are burdened by rising rents and stagnant wages,” said Chris Salvati, ApartmentList economist.
- Growth of home prices is finally slowing down.You may have stayed away from the home buying market because of skyrocketing prices, but it looks like the days of endless price growth are numbered. Price growth has actually slowed down in half of the nation’s 35 biggest metro areas, and in red-hot markets like San Diego, price-cuts have become the norm.
- Mortgage rates are a lot better than you realize.Rates might have increased slightly over the last year or so, but you’re not getting the full picture. If you look at the last 30 years of data, rates are still low, historically speaking. The average 30-year mortgage rate in 1998 was nearly 7% this time of year — more than 2 percentage points higher than today’s average. That can mean big savings over the full term of a loan.
Still on the fence about buying a home? Contact your local Embrace loan officer — they will explain your options. Let our experts guide the way!