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Here Are 5 Ways The Housing Market Affects Renters

Here Are 5 Ways The Housing Market Affects Renters

Business

With a housing market that always seems to be operating unpredictably, purchasing a home has become harder and much more stress-inducing. As mortgage rates rise, the values of homes grow with it, leaving renters with no other possibility but to continue renting. 

But there are plenty of reasons why the housing market has affected renters, and we’re here to tell you how:

Housing Market Issues 

Housing Inventory is Low

Due to the pandemic, many people were forced to stay home, and cities shut down to prevent COVID-19 from spreading. The shift in lifestyles left a lot of individuals putting off their plans to sell their homes, and because everything came to a halt, it also meant that no new houses were getting built. As a result, building supply prices also skyrocketed. 

So, no existing homes were getting sold, and no new homes were being constructed. Fast forward to today – any houses getting built are coming up at alarming prices. This has left renters with no options but to continue renewing their leases as they did throughout the pandemic. However, some individuals aren’t as lucky and are now facing obscene jumps in their rent. These are major reasons why so many renters can’t move just yet: The rental price hike and the lack of homes for sale. 

Mortgage Interest Rates Are Getting Higher

There was a time over two years ago when interest rates were at a record low rate that averaged 2.65% for a 30-year fixed-rate mortgage. Today is a different story – mortgage rates have been steadily climbing. 

Let’s say you purchased a house with a 5% interest rate. If that interest rate were to jump a full percentage, you could be looking at a huge spike in what you pay each month, depending on the cost of the house. This isn’t an ideal situation for some homeowners who can’t afford their mortgages and have to rent instead. Not only does this affect other first-time renters looking for an apartment or condo, but it increases the demand for rentals as well. 

Higher Home Prices

Similarly, despite the mortgage rates rising, home prices have also shot up, turning it into a seller’s market rather than a buyer’s market. When the pandemic stood in the way of new homes being produced, the National Association of Home Builders reported that more than 90% of builders were having trouble acquiring building supplies and appliances. 

Due to higher housing prices, many would-be homebuyers have flocked to renting. As a result, they’ve contributed to the overwhelming demand for rental properties, edging out and outbidding other renters trying to find themselves a place to live. 

Expiration of Rent Freezes

During the COVID-19 epidemic, many management companies in cities across the country had placed limits on rent increases or froze the rent altogether. Now that the world is slowly moving again, those measures have begun to expire. 

Many renters have noticed their monthly rent increase as much as 25%, which can sometimes be up to $200-$300 more than their current rent. This is due to the large demand of those who are renting because they’re unable to afford the asking price of a house on the market and that most property management companies are trying to recoup their losses during the pandemic. However, some companies are trying their best to keep renters happy. 

Globe Property Management is one of the few property management companies trying to stay on top of the competitive market prices and offer affordable rentals to those who need them. 

Wealthier Renters 

You know those individuals that aren’t able to afford a home? Well, chances are they’ve saved a lot of the money that was supposed to go toward a new home, and they’re now paying those rising rental prices. This is another way that the housing market fluctuations have affected renters. It’s becoming much harder for renters to find affordable locations because of even more demand and wealthier renters contributing to the growing rental prices.It can be tricky navigating through the current rental and housing market, but according to Leo Wilk real estate in Vancouver, you need a realtor that has your best interests at heart. You just have to keep your chin up and find a trusted real estate agent or property management company that can help you get closer to your new living space.

Business

Here Are 5 Ways The Housing Market Affects Renters