According to a study by the Joint Center for Housing Studies at Harvard University, the number of rental households was up 3.4 million (10%) between 2004 and 2009. Considering the enormous amount of foreclosures still waiting to be processed, that figure will surely increase as more and more people lose their homes.
Back in 'the day', owning your home had many benefits: it was a status symbol, it provided security for you and your family, it was yours to do with as you pleased, and most importantly, it was a good investment. For decades, home values increased consistently, and the equity acquired provided the means for college educations, renovations, and retirement plans; sadly, those days are long gone.
With an estimated 1 million foreclosures expected in 2010 and approximately 20% of all mortgages in America underwater (mortgage worth more than the property), the dream of owning a home is quickly turning into a nightmare. Combine this with dismal unemployment numbers, and greatly reduced consumer confidence in terms of buying a home, and it becomes clear that the rental market is set to take off.
On top of those losing their homes and now needing to rent, the first-time buyers market is also taking a hit. The real estate crash has prompted lending institutions to tighten their lending standards, making it very difficult for the majority of first-time buyers to get into the game. This will result in even more demand for rental units, as turnover will be minimal.
For the younger Gen-Xers, and the Gen-Y demographic, the dream of homeownership may not even develop. After all, what would motivate them to enter into a market that has essentially ruined their parent's financial situations? The attitude of this younger generation is focused more on instant gratification; an "I want it now" mindset that is not conducive with saving for a down payment. This generation is also faced with an era of $4 coffees and $3/gallon gas, making it difficult to even consider a mortgage payment and other household expenses. Social lives could actually be enhanced by not having to worry about mortgages and property taxes, and the overall economy could also benefit from having consumers with more disposable income.
Possibly emerging as a better option to buying a home, how will more renters affect the housing market? Will Realtors have to redirect their marketing efforts to renting properties rather than buying and selling? Will the investor market be enhanced due to the demand for revenue generating properties?
Only time will tell how severe the changes will be, but with no signs of a drastic economic recovery in the near future, there is no doubt a trend leaning towards renting versus buying will have a significant affect on how we view the notion of homeownership and the housing industry as a whole.
Warning: include(): http:// wrapper is disabled in the server configuration by allow_url_include=0 in /home/onlineb1/public_html/realestateproarticles/inc/extra_rlinks.inc.php on line 149
Warning: include(http://www.realestateproarticles.com/catads/cat277.php): failed to open stream: no suitable wrapper could be found in /home/onlineb1/public_html/realestateproarticles/inc/extra_rlinks.inc.php on line 149
Warning: include(): Failed opening 'http://www.realestateproarticles.com/catads/cat277.php' for inclusion (include_path='.:/usr/local/php56/pear') in /home/onlineb1/public_html/realestateproarticles/inc/extra_rlinks.inc.php on line 149