Buying a Home: What Happens When Americans Can No Longer Afford to Rent?
Recent stories in the news about how even employed Americans are being priced out of being able to rent raises some serious questions about delaying on the decision of buying a home and investing in real estate for maximum profit.
In some areas of the country rents are rising fast due to high demand but is this sustainable if average Americans can’t afford the price tag? Manhattan apartments are some of those which are tapping out at the high end right now with vacancies beginning to appear. Then there are incredibly hot spots like Phoenix where demand is spiking the cost of homes but is the underlying market and industry there to support further increases and positive cash flow?
Home prices, rents and mortgage interest rates are still relatively at bottom and are just beginning to rise, with expectations of at least a decade of increases ahead.
Clearly this means Americans are much better off buying a home now. This is especially true when you can buy a home now for a fraction of what it costs to rent in most cities. For most this is a unique, once in a lifetime opportunity to build wealth and get ahead. If not now, how will you afford double the rent in 10 years from now? Will your wages double by then? Remember inflation will lift other expenses too!
What about real estate investing? Of course as economy improves and job markets and incomes improve there will be more room for rents to grow but are you investing in the areas with most room for growth and where there is plenty of sustainable demand?
This is a great time for buying a home whether to live in or as a rental property and most Americans won’t ever see a better time in their lives but it still pays to do your homework and make a wise investment.