A double-edged sword: 40% of homeowners in the US wouldn’t be able to afford their homes if buying today — how some are stuck, while others are laughing all the way to the bank
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Some or all links contained within this article are paid links.
Over the last several years, real estate prices have soared to levels they’ve never been, and this is changing the way that we view the housing market.
Recently, a survey from Redfin (a real estate brokerage) asked the question, “If you were buying a home today, could you afford a home like yours in your current neighborhood?” The results were eye-opening.
Don't miss
Commercial real estate has beaten the stock market for 25 years — but only the super rich could buy in. Here's how even ordinary investors can become the landlord of Walmart, Whole Foods or Kroger
Cost-of-living in America is still out of control — use these 3 'real assets' to protect your wealth today, no matter what the US Fed does or says
These 5 magic money moves will boost you up America's net worth ladder in 2024 — and you can complete each step within minutes. Here's how
Only 42.1% of those who answered the survey answered that they probably could, while 38% were clear that they definitely could not. Not all that surprising, considering Redfin points out that the average cost of a home has doubled over the past 10 years.
These answers provide important insight into some of the reasons why it’s becoming increasingly difficult for new people to enter the market or for those with a home to consider moving.
A fly in the ointment
This situation has become a catch-22 for many Americans. Those with homes that are appreciating at unprecedented rates are enjoying the fact that they’re making more than many of them ever dreamed of as an ROI.
By the same token, many of these same people are now trapped. Unable to move, because of the fear that they won’t be able to find a comparable property in a new area, or that the money they’ve made on their investment will be completely drained by the cost of purchasing a new home.
Getting a new mortgage is another major issue since mortgage rates have increased substantially over the past decade. Freddie Mac’s 7.02% 30-year fixed-rate mortgage is a great example of this trend.
In fact, Redfin calculated that a median-priced home in the US requires a monthly mortgage payment of $2,864, or $34,368 annually. With the median annual income in the US being only $48,060, home ownership is simply not possible for a substantial portion of Americans unless they have investments or assets to leverage.
So, what do we do? Well, the good news is that there are still some great ways to use the real estate market to make money without having to buy or manage a property.
Help has arrived
Arrived — a real estate company specializing in helping people invest in vacation rentals — is changing how people break into real estate investing.
This gives you the power to unlock many of the same benefits that you can get from investing in real estate through property purchases, such as appreciation and rental income.
Less than 0.2% of homes pass the rigorous diligence process that Arrived has in place, so these properties are vetted to be the highest quality, both in terms of each home’s value and expected ROI.
To get started, all you have to do is sign up to browse Arrived’s properties , choose one that fits your desired investment profile, buy shares, and you’ll be ready to start earning rental income and appreciation. It’s really that easy to get started!
Read more: Jeff Bezos and Oprah Winfrey invest in this asset to keep their wealth safe — you may want to do the same in 2024
Reap the benefits of the commercial market
People have been touting the potential benefits of investing in the commercial real estate market for years. However, First National Realty Partners (FNRP) is making it easy and affordable for people to take advantage of institutional-quality, grocery-anchored commercial real estate investment opportunities.
As one of the fastest-growing, vertically integrated private equity firms in the U.S., FNRP is setting a new standard for commercial real estate investments.
With companies like Whole Foods, Krogers, Walmart, and other commercial real estate giants in their tenancy, FNRP uses proprietary technology to vet every potential deal against a very rigorous set of investment criteria.
If the deal passes this stringent process, the firm will handle all the heavy lifting for you, managing everything from the investment life cycle to leasing to property management.
Plus, FNRP’s secure online platform makes the process of getting started quick, easy and convenient.
Leverage the stability of the private market
Another great method to beat the rising mortgage rates is investing in the private real estate sector; especially if you can find a platform that’s calibrated for consistent growth.
Fundrise is a real estate investment firm that specializes in electronic Real Estate Investment Trusts (eREITs). Using a combination of different strategies, Fundrise builds targeted portfolios that are more resilient and have proven to deliver consistently strong results.
Private market assets are less likely to be affected by market fluctuations (i.e., the forest fire that is the housing market right now), which means you can invest knowing you’ll be best positioned for longterm financial stability.
What to read next
Car insurance premiums in America are through the roof — and only getting worse. But 5 minutes could have you paying as little as $29/month
‘Baby boomers bust': Robert Kiyosaki warns that older Americans will get crushed in the 'biggest bubble in history' — 3 shockproof assets for instant insurance now
The 5 most expensive mistakes in options trading and how to avoid them
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
