There is a growing demand of rental market. The data reveal that renter population now includes the older people.
CNN reports that millennials, who comprise the renter population, are now facing tight competition from people that are older, as well as higher income and better credit. Figures showed that most of the renters were comprised of people that were in their 50s and 60s. The Harvard Joint Center for Housing Studies reported that renters have increased since 2005 with a greater part of them being 40 and beyond. This includes an increasing number of Baby Boomers and Gen-Xers.
Senior research associate, John Spader, of the Joint Center for Housing Studies says that a lot of people were discouraged from homeownership because of the housing collapse in 2008. The strict credit implementations were also one of the reasons that prevent renters from getting a housing loan.
Another factor that contributes to the rental market demand rather than ownership is the desire for a new lifestyle. Older people mostly do not have their children with them anymore. They are practically living by themselves again. Another point is paying mortgage at such an old age can become quite a heavy responsibility. A Northeast Florida real estate agent, Cara Ameer, mentions that boomer-aged clients want to travel and don't want to be boxed in by mortgage payments, upkeep and expenses. She has seen a 15% increase in her clients of this category selling their homes to rent a place over the past few years.
WLWT5 adds more for real estate news, citing that most of the homeowners that are older would want to sell their homes to take advantage of the current increase in housing prices.
However, it is rather costly to become a renter at this time of age because of the higher rental rates. This is due to the increase in demand and having low inventory.
Sharon Curry, now 68 years old, sold her home near Orange County, California in 2013 and started renting. She earned $200,000 above her purchase price and thought she would live on the rest of her life with it. But recent rise on rent has proven her wrong. Initially, her rental rate started at $1,670 for her one-bedroom apartment and now she's shelling out $1,962 a month. She's concerned that rental rates will continue to rise. Although she is presently working, she admits that she can't forever rely on what she earns. She says she doesn't know until when she will be working and finds herself in a sort of a puzzle as to how she would solve her predicament.
Do you think rents will increase in the coming months because of the market demand? Share your thoughts in the comment box below.
