Vacancy rates for rental housing nationwide were at a 20-year low this year. It should come as no surprise that is primarily because of increasing demand and low inventory… and that it is causing rents to continue to rise.
Rent.com reports that 68% of property managers predict that rental rates will continue to rise by about 8% in the next year. Zillow reports that "rising rents won't let up in 2016, and will continue to set new records. The next year will bring the least affordable median rents ever."
Two of my current clients are indicators of the results of this trend… one is a young couple ready to stop paying rent and buy their first home… the other is a young professional buying a six-unit apartment investment property. Both are reflections of how the rental market is affecting the real estate market.
With rents rising faster than incomes and home prices (MN home prices expected to rise 4.1%), more renters are thinking about buying. You are paying for a home whether you buy or rent… the difference is whether you are paying for your own home or that of your landlord. If you pay monthly rent of $1,400 you will pay over $50,000 in rent in only 3 years… and over $250,000 in 15 years!
If you are considering buying a home for yourself or as an investment, talk to a real estate professional and lender in your area… interest rates are trending up!
Sharlene Hensrud, RE/MAX Results - Twin Cities Buyer's Agent