In 2017, if you have made a big decision of buying a house, you must keep in mind the below aspects. If you are in a rental property probably you may be aware of this prior that over the past ten years, rents are reaching up and up.
In several parts of the country, the rental values are increasing more than that of home values in a fast pace. Since July 2015, this rate of rental growth has been gradually slowed as per the research of Zillow experts.
Even though rents are not going to drop down in mere future, their increasing rate will be more likely to be moderate unlike before including the notable exclusions in hot markets.
Listed below are the top five predictions that are expected to happen in the rental market during this year.
The rental appreciation will get stabilized this year, with overall U.S. rental increase rate nearly flat around 1.5%. Hot markets in the country will likely to see appreciation above five percent, and hence it may take many years prior renters staying in these hot market regions find some respite. Because of the rise in multifamily construction, there exists a slowdown in rents increase.
Meeting the continuous demand, there is a likely increased supply of inventory which keeps the rental market in check that is being a preferable new for renters. With the increase in the income levels of the people nationwide, the income spent on rent percentage also got reasonably more.
More Millennials will purchase homes
Since 2006, the home ownership rate has been declining. Most households are rentals due to the aspects such as couples split up, roommates split up, the kids move out for their personal reasons and so on. As there is likely to be trend change happens that makes more millennial get married and show interest in buying a home as they will see to it as a greater personal freedom than staying in a rental abode.
Populations will relocate
Urban population will increase and suburban migration continues during this year. Low inventory supply and increase rental prices force the renters to switch over to the affordable housing in the suburbs and ready to drive to work.
Even though millennial will plan for up-sizing their family, Old Generation people and boomers will prefer to stay in walkable neighborhoods by downsizing their family and thus creating a peak demand for housing in urban locations.
High pricing new homes
In this year also, there exists rise of construction wages with the shrinking workforce who are into home construction. Also, single-family homes have not meet up the demand, which made the new homes priced higher. The combo of increasing wages and high pricing land has made several builders turn their concentration on the top-tier market and such homes are not reachable for several first home buyers. Due to this scenario, the buyers will continue to charge high rents.
Increase in Interest rates
Economists experts increase in interest rates with the fall in the unemployment rates and wages increase to grow. With a new administration in the country that supports low interest rates, we can however expect Fed may enforce renewed pressure in order to maintain rates down.