Rents continue to inch upwards and many renters say they know it would be cheaper to buy a home than rent, but they can’t qualify for a mortgage. With rising demand for rentals, landlords are increasing rents. Apartment rents have risen at their highest rate since 2007. Landlords feel they can charge more since vacancies have reached at a 10-year low at the same time that demand has surged. Asking rents have jumped nationally to $1,091 during the second quarter, the largest increase since the third quarter of 2007.
The improvement in rents is pretty pervasive. Even in places like Providence and Knoxville, which you don't think of as hotbeds for apartment activity, landlords felt the market was strong enough to raise rents on their tenants.
New York remains the market with the lowest number of vacancies and also the priciest place to rent by far. The monthly rent there averages $2,935, which is more than $1,000 higher than the second-priciest place to rent in the U.S., San Francisco.
Many finance experts recommend budgeting no more than 30 percent of household income to pay for housing costs. Yet nearly 40 percent of Americans are now paying more than a third, according to a U.S. Census Bureau survey. In New York, one-third of households spend more than half their pay on rent.
Meanwhile, for those who are able, purchasing a home has never been more affordable. It’s cheaper to purchase a home than rent in basically every major U.S. city.
But securing financing remains a renter's biggest obstacle to buying a home. Banks are pickier in what they require to qualify for a mortgage. Loans for home purchases reached a 12-year low last year as lenders tightened their credit standards. Now, potential borrowers often need an average credit score of 762 to get a mortgage backed by mortgage giants Freddie Mac or Fannie Mae.
Now is the time to get your self in a position to purchase a home. It is definitely a buyers market and there are still many loan programs to help you get qualified. Find yourself a knowable realtor and get yourself moving out a rental and into home ownership. Contact us for help 803-553-3740.