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A Stunning $441 Billion Paid in Rent
A recently released study revealed that a whopping $441 Billion was spent on rents in the U.S. in 2014. This represents an increase of over $20 Billion from the year before. As shown on the chart below, rents have increased consistently over the last 20+ years.
However, the recent increases have been astounding.
Why such a jump?
Many Millennials have postponed the purchase of their first home while waiting for the economy to recover. This has increased demand and dramatically lowered vacancy rates. In a recent article on the MarketWatch, economics reporter Ruth Mantell explains:“Landlords have ramped up rents by the fastest pace in six years, with national vacancy rates the lowest in two decades.”Zillow Chief Economist Stan Humphries let us know that increases will continue:
“Another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable."
4 Reasons to Buy Before Spring
The holiday season is behind us, time to focus on what exciting new experiences 2015 can bring! If you are planning on becoming a homeowner, or moving up to the home of your dreams in 2015, here are four great reasons to consider buying a home now, instead of waiting until spring.
1. Prices Will Continue to Rise
The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 15.1% (most pessimistic) and 32.8% (most optimistic). The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.2. Mortgage Interest Rates Are Projected to Increase
Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of 2015. An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.3. Either Way You are Paying a Mortgage
As a paper from the Joint Center for Housing Studies at Harvard University explains:“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”