Renters Are In Trouble Digging Themselves Out From Under
Renters Are In Trouble Digging Themselves Out From Under
This is a great article that I read in today's Realtor Magazine and it addresses an issue that we all knew was happening, rents are out of control. The article also mentions that for first time home buyers the home prices are rising faster then incomes making getting that down payment together even harder.
There is good news that this article has not brought up.
There seems to be a slight loosening of loan requirements
We have a lot of programs that have 10% and even less for downpayment.
House prices here in West Los Angeles seem top be stabilizing
The best news is that interest rates for a 30 year fixed loan is still below 4% pretty much guaranteeing you monthly payments will be less then
I have been working with my first time buyers and directing them to my Mortgage Brokers that are well versed in the struggle first time homebuyers are facing. The article brings to the surface the struggles but there are answers and ways to take advantage of the low interest rates. Call me at 310.505.5571 and let me answer the questions you have about getting out from renting
Why Renters May Be in Trouble
DAILY REAL ESTATE NEWS | TUESDAY, MARCH 17, 2015
The gap between rental costs and household income is widening to unsustainable levels across the country. As more renters face steeper costs, it may put them even further away from home ownership, according to a new study released by the National Association of REALTORS®. NAR evaluated income growth, housing costs, and changes in share of renter and owner occupied households over the past five years in metropolitan statistical areas across the
Over the last five years, a typical rent rose 15 percent, while the income of renters grew by only 11 percent, according to their research. "The gap has worsened in many areas as rents continue to climb and the accelerated pace of hiring has yet to give workers a meaningful bump in pay," says Lawrence Yun, NAR's chief economist.
New York, Seattle, and San Jose, Calif., are among the cities where combined rent growth far exceeds wages, according to the survey. "Current renters seeking relief and looking to buy are facing the same dilemma: Home prices are rising much faster than their incomes," says Yun. "With rents taking up a larger chunk of household incomes, it's difficult for firsttime buyers – especially in highcost areas – to save for an adequate down payment."
Meanwhile, those who were able to buy a home in recent years have been insulated from the rising housing costs since they were able to locki a low 30 year fixed rate mortgage with a set monthly payment, according to NAR's study. As such, home owners were able to grow their net worth as home values increased and their mortgage balances went down.
"The result has been an unequal distribution of wealth as renters continue to feel the pinch of increasing housing costs every year," according to NAR’s study.
The markets that have seen rents rise by the highest amounts since 2009 are:
New York: 50.7%
San Jose, Calif.: 25.6%
St. Louis: 22.26%
"Many of the metro areas that have experienced the highest rent increases are popular to millennials because of their employment opportunities," says Yun. The key to relieve housing costs: Builders need to ramp up the supply of new home construction, according to Yun. He estimates that housing starts need to rise to 1.5 million. Over the past seven years, housing starts have fallen far short from that historical average – averaging about 766,000 per year.
"With a stronger economy and labor market, it's critical to increase housing starts for entrylevel buyers or else many will face affordability issues if their incomes aren’t compensating for the gains in home prices," Yun says.
I am Bob Schmalz a California Licensed Real Estate Broker, I am the founder and owner of West Los Angeles Real Estate Group, handling all Real Estate needs from residential to investments To name a few of the cities we cover in West Los Angeles; Beverly Hills, Santa Monica, Brentwood , Pacific Palisades and Malibu are some of the most popular. Our beliefs are that our clients should have the knowledge they need to make decisions in there Real Estate Goals. In this way our clients helps us make the right decisions for themselves.
FIRST TIME HOMEBUYERS:INTEREST RATES BELOW 4% + LOW DOWN PA
"Plain and simple, we wouldn't have our home if it weren't for Bob. My wife and I were first-time homebuyers, and Bob helped us through the process every step of the way. It didn't matter that our price range was on the low side, given the LA market - Bob treated us like VIP clients the whole way through. He worked with us for over four months, sending us listings every week, going out with us to see several each Saturday or Sunday, always with a smile on his face and the most helpful advice. I was concerned that he might lose patience with us, because we were very particular about what we wanted, but he made it a point to make sure we knew that we were the customers, and that we called the shots about this very important purchase. That said, he protected us from a couple of potentially bad decisions. He actually steered us away from a couple of places with higher listing prices (and therefore higher commissions) than what we eventually bought, because, in his words, they were "money pits" that would cost us too much in remodeling, etc.
When we finally found the perfect place, Bob knew just how to close the deal and helped us with every step, from the initial bid to renegotiations for repair costs to working with escrow. And we ended up getting a very good deal on this place - it's now worth considerably more than what we paid! Bob was friendly and humorous the whole way through, and he ultimately made what could be a stressful process a really enjoyable experience. Thanks, Bob!