In life, we refer to a confluence of favorable conditions as a “perfect storm” and we wait with baited breath for one to shine in our favor. Many conditions favorable to buy-and-hold investors have currently aligned in the real estate market and are signaling that now is a great time to purchase single-family rentals.
Don Ganguly, CEO at HomeUnion recently added to the discussion, noting how: “The dramatic drop in homeownership rates and rise in renters is reflective of lifestyle changes and the various barriers to homeownership.” He continued: “The Urban Institute even projected that renter households will grow from 40.7 million in 2010 to 47.9 million in 2020 and 53.7 million in 2030.” Below, we detail the reasons behind the rise in rentership and how you can capitalize on this growing trend.
Why Homeownership Rates Are Tumbling
- More stringent credit terms for potential homeowners – Big bank lenders continue to shy away from riskier borrowers, according to CNBC.
- Increasing home prices – Home prices continue to climb, making it difficult for many to purchase a home.
- Growing inability to save for a down payment – With large amounts of income going to rent and other expenses, many can’t afford to save enough for a down payment.
- Changing lifestyle preferences – The two largest potential home owner segments, Baby Boomers and Millennials, are showing less interest in being homeowners.
Tumbling Homeownership Rates Provide Investment Opportunities
Recall our “perfect storm” analogy. While there have been major swings in home prices over the years, they’re currently in recovery mode (and even projected to trend upwards, according to Freddie Mac). You can capitalize on the existing favorable conditions by investing now, before prices climb too high. Remember, there’s a strong pool of renters and every renter needs a property!
As favorable investing conditions continue to hold, you won’t want to miss out on the many available opportunities. We make you aware of all your options with just one 15-minute call. Call us today at 888-276-0232 or schedule a consultation.