Renters May Grow by 6 Million in Next Decade – Interesting Article –

I read this onย DAILY REAL ESTATE NEWS and thought it was good to share.

Renters May Grow by 6 Million in Next Decade

Since the housing crash in 2008, the number of renting households has soared. Within the next decade,ย  5 to 6 million new renter households are expected to be formed, according to the National Association of REALTORSยฎ.

Much of that increase may occur in the next two years.ย  Within that time, the U.S. Census Bureau predicts that renter households will grow from 38 million to 41 million.

“In general, across the country there are more renters now than there were two or three years ago,” says Wally Charnoff, CEO of RentRange.

Property management companies are booming, too. Officials with Real Property Management say the company has doubled in size over the past two years. The company has 230 offices in 47 states and adds an average of eight new franchises per month.

“Profound changes in the housing market have created significant demand for property management companies like ours,” Kirk McGary, CEO of Real Property Management, told HousingWire. “And it doesn’t look like that’s changing anytime soon.”

Charnoff adds that location may be a big driver for renters. With a shortage of for-sale homes nowadays, some families are being driven to rent in order to be able to live in a specific neighborhood with good schools, he notes. โ€œInstitutional investors have provided a lot of readily available property,โ€ he says.

However, he adds that rising mortgage rates may prompt more on-the-fence renters to jump into home ownership before housing affordability moves lower.

 

What do you think this means for our real estate market? ย Share your thoughts!

I read this article at:ย  http://realtormag.realtor.org/daily-news/2013/06/13/renters-may-grow-6-million-in-next-decade?om_rid=AACmlZ&om_mid=_BRufS1B8zTgy7W&om_ntype=RMODaily

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Are Home Prices Rising Too Fast?

Hello Readers!
Found this article and had to share it.ย  Why?ย  Because this is on all our minds. ย My 2 cents are in italics.
ย ย 
Whenย the real estate marketย hit bottom you could feel the thud.ย  Buyers were leery of buyingย afraid home prices would continue to fall and sellers wouldnโ€™t sell if their life depended on it not wanting to take any kind of loss.ย  Thankfully those days are behind us.ย  What a difference 1 year makes….it is obvious the memo is out and buyers are ready to buy again.ย ย However, sellers are not quite there yet.ย  It seems that the bulk of properties for sale since 2009 were pre and post foreclosures, overinundating the market with options.ย  Come 2012 and today, with sellers not quite ready to put their homes on the market inventory remains low in our area โ€“ thus pushing prices up.
No Realtor or client enjoys markets like this.ย  Multiple offers, over bidding, no contingencies โ€“ all this is back in force right now.ย  Ideally we would like to see a normal healthy market with normal growth.ย  But with so few homes for sales and pent up buyers jumping off the fence โ€“ it is amazing to see this change that has taken place in the real estate world.
Enjoy the article โ€“ and would love to hear YOUR thoughts too!
Are Home Prices Rising Too Fast?
Some housing analysts are concerned that the sudden rise in home prices could make homes more unaffordable again if the price increases outpace income growth,ย The Wall Street Journalย reports.
Average housing costs for home buyers who took out a mortgage were around 22.5 percent of average incomes, according to John Burns Real Estate Consulting. That is down from 38.5 percent in 2006, the peak of the housing bubble. The historical average is about 33 percent.
But with home prices rising in many markets and, in some, rising at a faster pace than income levels, will more people soon be priced out of the market?
Housing analysts say that, for now at least, lower mortgage rates are offsetting the higher prices of homes.
Borrowers have seen their purchasing power rise by around 33 percent over the past four years due to the low interest rates,ย The Wall Street Journalย reports. For example, a borrower can make a $1,000 monthly mortgage payment and qualify for a $222,000 mortgage at todayโ€™s low interest rates, compared to 2008 when theyโ€™d likely qualify for $165,000 when mortgage rates were around 6.1 percent — nearly double what they are today.
Borrowers are able to withstand home-price increases because of the low rates, not because household incomes are growing,ย The Wall Street Journalย reports. If mortgage rates tick back up to the 6 percent or 8 percent range, homes may look overpriced relative to incomes, according to housing analysts.
By: DAILY REAL ESTATE NEWS
Source: โ€œWhy Rising Interest Rates Could Eventually Curb Price Gains,โ€ The Wall Street Journal (April 10, 2013)
ย 
Got Questions? – The Caton Team is here to help.
Email Sabrina & Susan at:ย ย Info@TheCatonTeam.com
Visit our Website at:ย ย ย http://thecatonteam.com/
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Please enjoy my personal journey through homeownership at:
Thanks for reading – Sabrina