When it comes to the housing market, one question nearly always arises: “Why are more people opting to rent instead of buy?”
It’s estimated that, over the next decade, 5 to 6 million families will continue to rent. At the same time, two demographics are shifting the tides. One, 25 to 34 year olds are taking longer to purchase a home, while the older generation, mainly Baby Boomers, have decided to downsize out of larger homes into smaller, more manageable properties. For the latter, renting makes sense.
Yet, within these groups, what’s behind renting for greater periods of time?
With employment, you never know when you’ll need to relocate. Renting provides that flexibility, as it’s far easier to end a lease than put a home on the market.
Along with this perk, properties come partially furnished, with a refrigerator and kitchen basics. For repairs, the renter simply needs to contact the landlord.
Housing prices have gone up in more desirable sections. As a result, someone wanting to live in a better part of town decides to compromise: Rent, rather than buy. Particularly in cities, renting an apartment puts you in the region’s prime neighborhoods, close to shopping, transportation, and job opportunities.
Homeownership Doesn’t Seem Like a Sound Investment
It’s partially true: Buying a home won’t always get you a great return on your initial investment. In fact, when you sell the property years down the line, you’ll eventually break even. As the housing crash put many mortgages underwater, potential buyers have become wary of this aspect. In response, renting seems more financially sound.
Yet, what many don’t realize is, purchasing a property isn’t like buying stock. The price tag might not go up with time, but those who purchase tend to have higher net worth.
Difficult Financial Situations
Higher down payments, combined with greater student loan debt, have made purchasing a first home an impossibility for many of the younger demographic. What results is, a potential first-time buyer spends a decade accumulating enough to make a down payment.
At the same time, the Recession hit this generation hard. Employment opportunities, as a result, have been scarce, while wages fail to keep up with inflation or the cost of living.
Greater Overall Costs
Homeownership comes with many hidden costs. While you might make enough to cover the mortgage and insurance costs, do you have the funds to cover repairs? Looking at the expense behind it, many decide renting seems more cost effective.
When you do decide to take that first step, or are looking for another property later in life, work with By Carrier to explore your homeownership options in Central Connecticut. Contact our team for more information.