Is It a Good Time To Enter The Rental Housing Market?

In the previous year, rents around the entire nation had grown at a pace of just below 70%. On the contrary, inflation was 2.4%. That is a far cry from the rent ascent we had seen a few years ago. It is the absolute slowest pace we have witnessed in more than five years. Home values had risen a solid 6.8% in the past year; however, they appear to be slowing down as well. Zillow is projecting a growth of only 2.6% in the next year. Is there a cooling period in the real estate markets? We should take a look at the bigger picture.

Housing Inventory
Prior to anyone getting carried away with the vision that markets of real estate are on the verge of crashing, it is worth taking a break to point out just how low of a level there is in the housing inventory at this very moment. In fact, "low" happens to be an understatement. Homes' inventory states for sale had reached all-time lows in 2017's initial quarter. The problem has been horrendous for starter homes. Developers are not building enough of them, mostly because margins are not as high as they are with luxury homes. It is not just the sales sides of markets, either. Inventory of rental properties have been plunging for many years. After thudding to post-recession lows in 2016, it is still possible that vacant rental inventory has bottomed out.

Zillow's chief economist believes rental construction has been catching up with demand. Surprisingly, more renters are saying that they are planning on continuing to rent, instead of buying. According to a survey of renters that had released last month, 41% of renters are now saying that they have enough money to sustain beyond the next paycheck, which is up from last autumn, which was 34%. The number of households who are reporting that they're unable to pay for essentials had also fell to 14% from 20%. 

There are many reasons why an individual should consider looking at the value of the home that they may be considering renting. This is because they do not want to end up paying more on rent than what they should, as the amount that they pay on a recurring basis should reflect the value of the property and the area it is located in. If you are paying a high amount of rent for a property in a neighborhood that is not necessarily considered to be a good place to live, then it may not be worth your investment. Prior to renting a property, be sure to contact a real estate agent who is well experienced and has an idea of exactly what is occurring in the market at any particular moment in time. If you are having a difficult time in finding a proper agent, please don't hesitate to do a bit of researching online, as there are certainly a considerable amount to choose from in just about any community. The housing rental market is constantly fluctuating.