According to Forbes Rising Rental Prices are Forcing Millennials Into Homeownership
We’re all pretty much familiar with the notion of supply and demand. Living in a city there is only so much real estate available, especially in highly desirable neighborhoods. Even with the expansion of gentrification, the supply still hasn’t caught up with the demand. Therefore, not only are home prices increasing but so too are the rental prices.
The group that seems to be feeling the most pinch are the millennials. Attracted by universities, city living, and job opportunities the millennial market has been steadily increasing in Philadelphia. For those that fall into this demographic you may be in a financial pinch due to costs such as student loans. Therefore, a sharp increase in rent may detour you from extending a lease. In fact purchasing a home may actually make more financial sense.
In a recent article in Forbes.com regarding this issue, researchers have been getting a feel for the millennial market. Forbes spoke with the folks at Realtor.com to get a sense of just how the rising rents are affecting homeownership. “Danielle Hale, Chief Economist at realtor.com provides insights stated “We know rents have been going up pretty consistently the past few years. In the last 13 months rents have increased 4% nationwide. That’s not huge but relentless increases year after year add up. If buyers can lock in a monthly mortgage with a 30-year fixed there is a huge incentive to get into the home buying market. Millennials respond to that.”
It goes on to state, “According to an online survey of more than 1,000 active buyers conducted in early March by Toluna Research for realtor.com, 23% of millennials surveyed indicated that rising rent was a trigger for their home buying purchase. Realtor.com reports that HUD data shows rents were up in 85 of the top 100 metro areas, including nine metros where rents were up by double-digit percentages from a year ago.”
So for the millennials in Philadelphia feeling the rental squeeze you are not alone. Homeownership can be a great wealth builder and a great opportunity. If you have questions about homeownership and would like to explore your options, contact The Atacan Group today and speak with a real estate consultant at (215) 592-9522.