Why We Are Not Becoming A Nation Of Renters

Written by Posted On Thursday, 12 May 2022 00:00

National companies are purchasing thousands of homes to lease, and the CEO of one of these companies recently said on CBS 60 Minutes that we were becoming a nation of renters.

He added that home ownership is no longer the American dream. According to him, the American dream is to live a free lifestyle focused on convenience. 

He implied that 'convenience' is the ultimate amenity. Have a problem with an appliance? Let the landlord worry about it. 

He failed to mention that many of today's renters are not buying a home because they cannot qualify based on the required deposit and the monthly payment. 

A job loss, a new baby, a sick pet, a divorce, a costly car repair, and inflation could put financial pressure on renters who are finding it all they can do to meet the monthly payment. 

According to the Apartment Guide, 

"Nationwide rent prices for both one-bedroom and two-bedroom apartments have increased significantly year-over-year at 21.3 percent and 16.7 percent, respectively.

"After a brief lull in two-bedroom prices month-over-month, one- and two-bedroom rents increased slightly compared to October.

1-BR: $1,680 (+0.6 percent from prior month / +21.3 percent year-over-year)

2-BR: $1,958 (+0.4 percent from prior month / +16.7 percent year-over-year)

According to the Mortgage Bankers Association, the average 30-year-fixed home loan rate is now 5,37percent, up more than two percentage points since the year began. 

"So buyers of a typical existing home, which went for $375,000 in March, will pay  $440 more each month than they  would have paid in December if they had put 20 percent ($75,000) down and borrowed the rest at a fixed rate 30-year term."

But homebuilders, mortgage lenders, and Realtors will find a way. They always do.

Here is an excerpt from an April  letter to President Biden from the chairman of  the National Association of Homebuilders:

"An unexpectedly quick rise in interest rates, home prices and rents, and escalating lumber and material costs have significantly decreased housing affordability, particularly for entry-level buyers and renters.

"A shortage of entry-level housing has strong implications for the wealth, health, and stability of American communities. 

"The industry believes these challenges will worsen if meaningful steps are not taken to allow builders to increase the supply of affordable single-family and multifamily for-sale and for-rent housing," said NAHB Chairman Jerry Konter, as quoted by Bloomberg. "If the housing sector falters, the economy will surely follow."

We are not becoming a nation of renters. We may find that a segment of our society will rent because they enjoy the convenience of having everything done for them and have the financial resources to cover emergencies. Good for them. 

But owning real estate in America is the American dream. Maybe the white picket fence has been replaced by a security system.

But nothing has changed in the hearts of millions of Americans who dream of owning their own home.

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David Fletcher, NHCB

New Home Co-Broker Academy LLC offers affordable online new homes sales training and strategies based on the 20 year experience of its founder and CEO, David Fletcher. More than 5,000 Realtors earned their New Home Co-Broker (NHCB) certification over the past six years by successfully completing the 3-hour online course and passing an exam. 

Fletcher spend his 30-year career representing condominium builders/developers/ developers/single family builders and lenders He recruited, trained, and supervised an onsite sales team that sold more than $3 billion in more than 70 communities. 

His experience in working with both onsite agents and Realtors is unmatched in the industry.

To learn more about the course

 Broker/Owners - Due to the dynamics of the market, many of you will be approached with a request for new homes training beyond what you now offer. Some of you will be approached by agents who want to form new home teams, or you may rethinking about establishing a new home division. If so, as a professional courtesy, David, invites you to contact him for  a free consultation at davidf@newhomcobroker.com. No obligation. This offer may be withdrawn without notice.

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