Back in early October, we looked at a report from the Harvard Joint Centre for Housing Studies and Enterprise Community Partners that painted a very bleak picture for renters
The report predicted that the number of households that spend half or more of their income on rent will rise by at least 11% from 11.8 million to 13.1 million by 2025!
As if to give this forecast almost instant credibility, further evidence of even tougher times ahead in the rental sector have arrived today with a CNN Money article that says rents are expected to rise faster than inflation in 2016, increasing by around 3%-5% nationally.
It's yet more evidence that backs up the point we've been keen to emphasize throughout 2015 that right now is a simply incredible opportunity for anyone who can afford to buy their own home, locking in low mortgage rates and taking advantage of still very reasonable property prices.
The CNN article mentions that further bad news could arrive as soon as tomorrow when the Federal Reserve is widely expected to announce the first rise in interest rates for nine years, suggesting that resulting rising mortgage rates could push rental fees even higher. As we mentioned in last Tuesday's blog, however, that there is considerable conflicting historical evidence to suggest that home loan costs do not necessarily have a very direct correlation with Federal interest rates and are more directly influenced by bond market prices and inflation.
Nonetheless, sources such as realtor.com do suggest that rates will gradually rise in 2016. We've heard it all before and it hasn't happened, of course, but if it does occur, as it inevitably will at some point, then landlords will also feel able to push rentals up even more.
The article also makes the excellent point that paying more in rent makes it increasingly difficult to save adequately for a down payment on a home. If the expected trends continue, then it is likely that affordability for some first time buyers will be compromised.
While these predictions will be positive for many property investors, the message for anyone who can afford to buy a home is very clear and straightforward - Dont waste a moment!
Call us today for a detailed discussion related to your own circumstances and getting that vital first foot on the home ownership ladder!
Click here to read the CNN Money article.