Across the nation in many real estate markets that have been hit especially hard, there has been a surge in the need for rental units for individuals and families who no longer own homes. Employment is still low in many areas of the country, and when your unemployment check no longer covers the cost of your mortgage, it is time for many home owners to pack up and find somewhere cheaper to live. Many of these owners find themselves renters for at least a short time while they get back on their feet financially.
Unfortunately, in some areas of the country, vacant homes cannot be rented to families or individuals who need them because they are held up in foreclosure proceedings. Where there is a dearth of buyers, homes have been sitting vacant for months, or years in some cases.
As the economy continues to improve, there will be even more demand for rentals as family members who have been living with parents, siblings, or other family members return to living in their own spaces. However, it will take a while yet for the financial situations of home owners in trouble to improve enough to slow the rate of foreclosures still happening across the country. Likewise, it will take time to improve the people’s financial fortune to the point where they can again start buying homes at a rate close to what they were before the economy crashed.
In many areas, particularly where rentals are in high demand, landlords have been able to increase rents by up to almost 10% in some cases. The result in some markets is that buying a home is not significantly more expensive per month than renting one. It would seem that for many people the only real stumbling block between the two options is the number on your credit score. As government agencies tighten up the lending requirements it is becoming increasingly difficult for people with subpar credit scores to negotiate a loan with a low interest rate; lenders have been so burned by home owners who ended up walking away from mortgages that they are understandably wary about home loans currently.
The good news is that for those who can afford to buy a home to rent out or even just put in a rental suite in their existing home, there is a growing market out there. For home owners who can take advantage of this trend, there is the potential to help your personal financial recovery; talk to a Realtor if this sounds like an investment that you might like to investigate further.