Housing Blues Makes Renting Red Hot
The same is happening right now, in this housing market. While analysts are measuring housing stats they're also watching something else: more homeowners becoming renters. It's not an experiment per se, but, it does have a psychological component. It starts with the overall blues regarding the market's burst bubble. But, the blues might also provide a peek into changing attitudes about the value of renting over home ownership.
What does this mean for the average renter? Potential bargains - for the moment.
The Wall Street Journaltook notice and suggests that there are several reasons for the "more renters" trend. Here are a few: first, the flexibility of renting while seeking employment. Second, many of the renters who moved in with roommates en masse during the recession are (understandably) ready to move out. Third, the end of the home buying tax credit could make renting look like the better option.
Climbing demand in some markets could mean that it is in your best interest to lock in a longer lease at favorable cost. So lock in your relatively "low cost" lease now. Overall cost of renting is down 5% nationwide compared to the 2008 peak.
If you're set on eventually becoming a homeowner you can rent while you to "wait out" the turbulence in the single-family market. You may miss out on historically low mortgage rates and lower home prices, but, on the other hand you can try a rental home over an apartment and figure out if you'd really like to maintain a yard (and other chores associated with a home).
Lastly, the abundance of housing market pessimists gives plenty of opportunity for a bit of "reverse psychology" when negotiating your next lease.
One bright note? The uptick in rental rates might signal that demand hit bottom in housing two quarters earlier than expected. Despite the lingering blues about the housing market, that's good news for the economy.