Raising Rents Could Bump UP Home Sales
IMHO * this is NOT the case.....EMPLOYMENT stability will be the BOOST and not rising RENTS.....renters are 1) used to moving every 2 to 3 years ANYWAY; and 2) they are MORE mobile than homeowners stuck IN one property because they own it.
Once it is as easy to BUY and SELL as it is to RENT, then rising rents may be a factor.
Rental Rates Raise
Home sales get a boost from the rising prices occurring in the rental market, which is making it cheaper to own rather than rent in a growing number of cities. Why? As rents continue to rise, buying becomes a more and more attractive option as home affordability, or the percent of income it takes to pay the mortgage, continues to be among the most favorable in history.
The number of renters in the country increased during the housing crisis, while homeownership dropped to a 14-year low. But with rental costs rising nationwide, more renters may be lured to buying a home, particularly with home prices falling and mortgage rates hovering at record lows.
Mike Fratantoni, MBA’s vice president of economics and research, is forecasting home sales to increase 10 percent in 2013. An improving employment picture also is expected to have a positive impact on housing, MBA economists noted.
Since the home affordability index is at an all time low, you can buy a home for a lower percent of your income going out per month than renting.
Both home prices and sales are expected to increase. Lawrence Yun, chief economist for NAR, stated, “Falling visible and shadow inventory [bank-held properties], combined with a dearth of new-home and apartment construction during the past three years, assure that rents will continue to rise, with likely home price increases."
IT IS ALL ABOUT YOUR REAL ESTATE NEEDS
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