Want to buy a home in the year ahead — but feel glued in place thanks to ever-rising home prices? You’re not alone.
As a renter, you understand you are caught between a rock and hard place. When rents are rising, but it costs more to move, you just renew the lease and pay more year over year. It's important for you to know rents have been rising since 1988, not just since 2019. While skyrocketing since 2019, the rents have gradually appreciated since 1988.
If you are like many renters you want to buy, but the market seems intense and as many put it crazy. Yet you know another rent increase is coming. You may find yourself worrying and wondering how bad it will be? And if you will have to move when your lease is up. Before you decide whether to look for a new apartment it's important to understand the true costs of renting and buying in 2022.
In 2021, rents grew dramatically. According to ApartmentList.com, since January 2021:
“. . . the national median rent has increased by a staggering 17.8 percent. To put that in context, rent growth from January to November averaged just 2.6 percent in the pre-pandemic years from 2017-2019.”
That increase in 2021 was far greater than the typical rent increases we’ve seen in recent years. In other words – rents are rising fast. And the 2022 National Housing Forecast from realtor.com projects prices for vacant units will continue to increase this year:
“In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth . . .”
That means, if you’re planning to move into a different rental this year, you’ll likely pay far more than you have in years past.
Homeownership Provides an Alternative to Rising Rents
If you’re a renter facing rising rental costs, you might wonder what alternatives you have. Move back home, get new roommates, rent a room from someone, or make the move to consider homeownership. One of the many benefits of homeownership is it provides a stable monthly cost you can lock in for the duration of your loan.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“. . . fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
If you’re planning to make a move this year, locking in your monthly housing costs for 15-30 years can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases.
Homeowners also enjoy the added benefit of home equity, which has grown substantially right now. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $56,700 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage, you grow your wealth through the forced savings that is your home equity.
Henry Ford said, "Whether you think you can, or think you can't--you're right."
That's right, it's all in your mindset. It is in your head. Of course, you may be thinking, I don't know where to start, my credit isn't exactly perfect, the home prices are skyrocketing and there is no affordable housing so to speak. While there are real obstacles to clear, all can be accomplished with the right mindset. Many people overestimate the difficulty of getting approved or qualifying to buy a home. Many people believe myths they have heard, and rumors keep people from trying. Things such as needing to have a 700+ credit score, having 20% down, or even that they have to find a home first and then start. If you want to know how easy it is, just check out this link on buying a home with me or give me a call directly.
Ready to Explore the Las Vegas Market?
If you’re thinking about buying a home this year, want to talk to someone with no fear about the process or obstacles being faced, or even begin the home buying process. Give Valerie Brown with Realty Edge a call. It’s important to keep in mind the true costs you’ll face, the real obstacles against you, not the ones you imagine and she will help make sure you get the right home and make the process as easy as possible.
LOOKING TO SELL?
For sellers, what a great time to sell! Inventory is low and motivated buyers are looking for houses for sale. Sellers don't have competition with as many property owners. Some would be sellers have decided to wait out the pandemic, but more and more buyers enter the market. This only further pushes the pricing point higher due to tight supply. Check your home's value here! or CONTACT ME HERE FOR MORE INFORMATION!
LOOKING TO BUY?
For buyers, the inventory is slowly increasing and mortgage rates are at historic all-time lows, record-breaking never seen before lows. Buyers are out in force taking full advantage of their higher than usual purchasing power. It is a win-win scenario for both sellers and buyers. CONTACT ME HERE to get started!