People often ask whether or not now is a good time to buy a home. No one ever asks when a good time to rent is. However, we want to make certain that everyone understands that today is NOT a good time to rent.
The Census Bureau recently released their first quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:
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?
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.”
Bottom Line
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 ready and willing to buy, let's meet up todetermine if you are able to today!
That's a funny combination of the headline and the picture :)
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