Astronomical Rental Rates Are Changing the Housing Market
Across Chicagoland, renters are paying an increasingly higher price for their temporary homes. The real problem, however, is that these rates are outpacing their income growth. Experts across the country agree that a major change is coming this year, one that will greatly affect buyers and sellers.
As former renters flood the market in 2016, housing demand will skyrocket. To be successful in such competitive circumstances, buyers will need to be well prepared to make quick, efficient decisions. With the "Know Before You Owe" mortgage rule in effect, it's more important than ever to have a solid preapproval in place before making an offer. This will make a potential buyer more attractive to sellers and more likely to win against multiple offers.
Fewer homes for sale across Chicagoland means they are selling faster and for more money (91 percent of 2008 levels, adjusted for inflation). While homeownership has fallen to historic lows, a recent survey by Fannie Mae found that 69 percent of renters plan to buy a home the next time they move. Pair that with first-time Millennial buyers and the estimated 950,000 formerly distressed homeowners coming back to the market, and 2016 looks like another strong seller's market.
Before signing another lease, consider RealtyTrac's 2016 Rental Affordability Analysis that found buying is more affordable than renting in Cook County. Misconceptions still abound when it comes to making the leap from renting to buying, but there are many programs that offer down payment and closing-cost assistance.
If you are interested in learning more about how current market conditions can help you achieve your real estate goals, let's talk. My full-service real estate team will help you prepare for the busy spring market.