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        <title>Huntsville, Al Real Estate Blog</title>
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    <guid>https://www.mattcurtisrealestate.com/HuntsvilleAlRealEstateBlog/why-rents-are-rising.html</guid>
    <link>https://www.mattcurtisrealestate.com/HuntsvilleAlRealEstateBlog/why-rents-are-rising.html</link>
        <author>leadrouter@mattcurtisrealestate.com (Matt Curtis)</author>
        <title>Why Rents Are Rising </title>
    <description> <![CDATA[ 
Why Rents Are Rising










According to a recent article by Redfin, the average rent in the U.S. increased 14.1 year over year. Why are rents rising and when will these rents come back down?


1) We all know that we're experiencing the highest inflation rate we've seen in twenty years of 8.5. This is a result of the Fed printing more and more dollars. In fact, 40 of the dollars in circulation have been printed in the last two years.


2) Demographics. Our nation is continuing to grow but our housing has not kept pace since the 2008 real estate crash.


3) Millennials and lack of buying opportunities for this generation. Many of them are at prime ages to settle down and purchase their first home. However, the challenge is that they're losing out on bidding wars to cash buyers and investors. This is causing them to enter back into the rental market, thereby increasing demand for a commodity that is already in short supply.


First time homebuyers only account for 27 of the home purchases right now, which is down from about 47 in 2010. On top of this, Huntsville was already in a growth mode with thousands of new jobs coming to the area. This is challenging because it's making it harder for renters to save up enough money for a down payment to purchase their first home. Renting makes it very challenging to build up net worth. The average net worth of a renter is only $6,300 compared to a homeowner which is over 40x that at $255,000.
 ]]> </description>
    <pubDate>Tue, 17 May 2022 15:23:00 -0500</pubDate>
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    <guid>https://www.mattcurtisrealestate.com/HuntsvilleAlRealEstateBlog/bad-news-for-huntsville-renters.html</guid>
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        <author>leadrouter@mattcurtisrealestate.com (Matt Curtis)</author>
        <title>Bad News for Huntsville Renters</title>
    <description> <![CDATA[ 
Bad News for Huntsville Renters













There's bad news out there for renters in Huntsville, Alabama with rents rising 17 nationally. Our local WAYY 31 reported average rent is up $283 a month to an average of $1,792. That's over $3,300 per year which is the difference between a staycation at the apartment pool and heading to the beach this summer.


The article also cites the chief economist at Realtor.com who said, “Rents will remain high and expect some cooling from the current pace.” I think that's a little optimistic because some cooling could also mean we rise 6, 8, or even 10. So with that, I still think there's going to be a lot more room for these rates to rise. 


The reason for that is 40 of US dollars have been printed in the last 24 months. Since 17 is much less than 40; I do believe that rents are going to continue to rise over the next one, two and even three plus years. If you don't believe me, watch what the smart money is doing. One in four and even up to one in three homes in some areas are being purchased by investors and Wall Street money. This is one reason why home ownership is such an integral part of the American dream.


Individuals and families can lock in a 30 year mortgage investment versus having rent payments rise year after year. The numbers don't lie, homeowners have 40x the average net worth of renters. That's $255,000 versus an average of $6,300 for renters. The Wall Street Journal recently cited Zillow’s report where the average homeowner made more in home appreciation than in their job in 2021. That's $52,667 versus the average income of $50,000.


 



 ]]> </description>
    <pubDate>Tue, 26 Apr 2022 13:26:00 -0500</pubDate>
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    <guid>https://www.mattcurtisrealestate.com/HuntsvilleAlRealEstateBlog/nation-of-renters.html</guid>
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        <author>leadrouter@mattcurtisrealestate.com (Matt Curtis)</author>
        <title>Nation of Renters</title>
    <description> <![CDATA[ 



Should America become a 'Nation of Renters'?








When you think of the American dream, what do you think of? If you're like most people, it's owning your home with a white picket fence. Okay, maybe not the white picket fence anymore. Bloomberg published an article recently by Karl Smith that our Nation's becoming a ‘Nation of Renters’, which unfortunately I believe is the case. The article said, “America actually should become a nation of renters”; which I think is absolutely preposterous. Let's take a look at some of those arguments and why it is so ridiculous:


1 - Lack of Liquidity


They pointed to the lack of liquidity in the housing market which sometimes makes it challenging to migrate to new areas. While this is true in some respects, in that it can slow down a move to being contingent on the sale of a new home, I actually think it's the opposite. When you own a home, you build equity that gives you the very ability to have mobility in the first place to make a move. And one of the reasons for that is the average net worth of a renter is only $6,300. You can't move a family of four across the country for $6,300. If you compare that with the average net worth of a homeowner, which is over 40x that at $255,000; it gives you the ability to have the mobility.





2 - Testing New Neighborhoods


The article also argues that with the more rental opportunities you have, you have a better chance to test out a new neighborhood without that financial commitment.Now this is true in theory, but for most people they're not going to have the funds to kind of “move up” and try new things. This is because rent continues to go up with inflation versus having that fixed rate mortgage that is helping you to build that equity. 


3 - Dignity &amp; Pride





Karl also left out the details of basic human psychology that comes behind dignity and pride of home ownership. We already talked about the Wealth Generation piece which builds family legacy. Basic human dignity comes through ownership. We're not a socialistic society, we're a capitalistic society. This is where socialism fails, when they take away ownership from the population. Homeownership is important to both individuals and communities. That's why it's so dangerous that 1 out of 4 homes right now and in some areas actually as high as 1 out of 3 homes are being purchased by out-of-town investors and hedge funds.





Summary


 


It's predicted that millions of people will become lifelong renters over the next few years. Don't be a statistic and don't let your friends and family become a statistic. What do you think? Comment below if America should become a 'Nation of Renters. If you're concerned about becoming a lifelong renter, contact us.


 



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    <pubDate>Tue, 19 Apr 2022 11:42:00 -0500</pubDate>
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