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More Americans say it’s smarter to rent than buy

Faced with a hot real estate market, tenants are losing confidence that they will ever have a home. The Federal Reserve Bank of New York released Monday. report that they were planning to buy a house, but now see renting as the best financial decision. Most respondents either preferred to rent (36%) or said they expected prices to fall before buying (42%). The findings come after house prices rose the most last year, surpassing even the overproductive growth of the first housing bubble in 2000. Some people hoping to buy have been priced out of the market, forcing them to rent instead. This in turn helped to increase rental prices. The change in sentiment in the NY Fed survey is due to families with less college education and lower incomes. About one in three (34%) of respondents who make less than $ 60,000 believe they will eventually get a home. This is less than 46% in 2020. Similarly, 34% of those with less than a degree expect to have a home, up from 46% two years ago. Meanwhile, families are preparing to raise rental rates. Households expect rents to rise by 11.5% over the next 12 months, almost double the rate of 6.6% expected in February 2021. And over the next five years, households expect annual rents to increase by 5 per cent. , 2%, compared to 4.4% a year ago “. “These figures suggest a rise in rents in the near future, followed by more modest growth in the coming years,” the NY Fed said in a statement.

Faced with a hot real estate market, tenants are losing confidence that they will ever have a home.

The average chance of getting a home sometime in the future has dropped to 43.3% this year, from 51.6% in 2021, according to the Federal Reserve Bank of New York. overview released on Monday.

This is the lowest level since the NY Fed started asking the question in 2015.

High prices seem to be a driving force: 22 percent of households surveyed say they planned to buy a home but now consider renting as the best financial decision. Most respondents either preferred to rent (36%) or said they expected prices to fall before buying (42%).

The findings come after house prices occurred last year with the most recordings, even overcoming the overproductive growth of the housing bubble in the early 2000s. Some people hoping to buy have been priced out of the market, forcing them to rent instead. This in turn helped to increase rental prices.

The change in sentiment in the NY Fed survey is due to families with less college education and lower incomes.

About one in three (34%) of respondents who make less than $ 60,000 believe that they will eventually get a home. This is lower than 46% in 2020.

Similarly, 34% of those with less than a degree expect to have a home, up from 46% two years ago.

Meanwhile, families are preparing to raise rental rates.

Households expect rents to increase by 11.5% over the next 12 months, almost double the 6.6% rate expected in February 2021. And over the next five years, households expect annual rents to increase by 5, 2%, compared to 4.4% a year ago.

“Overall, these figures indicate an increase in rents in the near future, followed by more modest growth in the coming years,” the NY Fed said in a report.

More Americans say it’s smarter to rent than buy Source link More Americans say it’s smarter to rent than buy

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