If you are feeling squeezed each month as you pay rent, or as you get your new lease notification, or as you shop around for a new apartment then you are not alone.
The cost of apartment rents continue to rise even as the economy continues to be fairly stagnant with unemployment rates and household income.
"The average monthly rent for an apartment rose to $1,099 in the second quarter of 2014, up 3.4% over the 12-month period ended in June, according to data from the real-estate research firm Reis. The second quarter was the 18th consecutive quarter of rent increases."
It also reports,
"In San Francisco, San Jose, Calif. and Seattle, rent growth exceeded 6% in the past year, and even cities like Charleston, S.C. and Nashville, Tenn.—cities not associated with high rents—saw growth of about 5% over the same period."
6% increase in rental prices!
It's no wonder you are feeling squeezed each month with a 6% increase just last year and 18 consecutive quarters of rent increases.
Why are Rents Increasing?
In my opinion...
It's no surprise that student loan debt, lack of "higher" paying jobs and stricter financing requirements are making it a bit tougher to qualify for that mortgage.
Or is it?
There does seem to be a lot of hype in the media lately about "tight" mortgage-lending standards now-a-days.
But how tough is it, really?
Well, there are Zero Down Programs still in our Primary Market area of Snohomish County, for towns like Lake Stevens.
And there are FHA loans available that allow credit scores to 580 and even below.
What I'm saying is there is a very good chance that if you want to be homeowner, you can be.
Look, they're not doing Undocumented Income Mortgages, like they did before the crash. But they shouldn't be doing that either.
So the idea of it being "hard" to get a mortgage, or that lender financing is "tight", is all relative.
In comparison to what was going on years before, yes it's tougher.
Is it impossible to get a mortgage to buy a home? Not at all.
RENTS ARE HIGH... WILL LIKELY KEEP GROWING
Wall Street Journal in an article about apartment rents climbing quote Ryan Severino, an economist at Reis,
"Rents are at a higher base and still growing. They will likely keep growing for the next few years."
And then there is the additional costs of rent that might not be so noticeable.
Such as, the time to find a new place, likely a more affordable place, come every six months to a year. The cost of moving that often.
The cost of coming up with first months rent, last months rent and security deposit. (Which isn't that far away from the downpayment you'd need for most homes.)
If you are getting tired of your rent increasing and looking for a new place to move to every six months or year, then start looking for YOUR next home.
If you have questions or concerns about the home buying process, start a conversation with us. It's what we love to do and there is NO-Obligation and NO Pressure.