Posts Tagged ‘Renting’

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2 Out of 3 Renters Want to Own. What’s Stopping Them?

June 9, 2015

Want-to-Buy-KCM

The Federal Reserve Bank of New York recently released the 2015 SCE Housing Survey. The survey revealed that most current renters would prefer owning and that 61.9% of them plan to buy a home within the next five years.

68.3% stated they would prefer owning (with 45.6% saying they ‘strongly’ prefer owning). When asked at what point in the future do they think they will own a primary residence:

  • 8.2% said within a year
  • 15.3% said in 1 to 2 years
  • 38.4% said between 3 to 5 years

What’s Holding Them Back?

Of the 68.3% who would prefer to own, 2 out of 3 cited difficulty in getting a mortgage for the reason they do not own. However, many believe that the reason so many think that it would be difficult to get a mortgage is not fully based on current market realities.

For example, studies have shown that there is confusion over the amount of money needed for a down payment. Research has shown that 40 to 50% of Americans believe that between 15-20% is the minimum required for a down payment. In reality, there are many programs available at 5% and even 3%. There are even some programs that don’t require any down payment (ex. VA loans).

Others fear they need a perfect credit score or believe that the overall mortgaging process has become almost impossible. Actually, the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association, has shown that, over the last seven months, access to mortgages has gotten much more available.

And the NY Fed study suggests that some renters are waiting for interest mortgage rates to fall even further. Fifty percent of the renters surveyed believe mortgage interest rates will fall over the next year and almost 10% believe that they will fall by more than 1%. However, the reality of the situation is that Freddie Mac, the Mortgage Bankers Association and the National Association of Realtors are all projecting that rates will be significantly higher at this time next year. They are all predicting mortgage rates will be almost 1% higher!

Bottom Line

Many renters want to own their own home. Some are not moving forward based on misunderstandings regarding the mortgage process. If you are currently a renter who desires the benefits of homeownership, sit down with a local real estate professional to determine what your options actually are.

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Rent is not a four letter word

August 22, 2009

In today’s marketplace, the one thing I am now seeing more and more often is qualified renters looking for executive level homes.

Why? Because they have lost their homes due to foreclosure. That’s right…these are great tenants who, in good times, were paying up to $10,000 per month in mortgage payments but due to circumstances, they are now displaced and need a rental home. They have high standards though and while willing to downsize…they still want a respectable, executive type home for around $2,000 to $3,000 per month. They can afford it.

The Wall Street Journal recently published an article entitled “The New American Dream: Renting”  and it was very accurate in reporting that with 1 in 355 home currently in foreclosure – these owners need to move into a rental home.

If you are an investor or if you have a vacant home – it’s time to think about renting and making a profit on your home for a few years while the market fluctuates. No one knows what the future holds – it’s still a mystery – but one thing is certain…there is a demand for rental housing and you have great quality tenants now available to rent your properties. Call me if you want more information.

 http://online.wsj.com/article/SB10001424052970204409904574350432677038184.html