In a rent affordability study, it was revealed that if a three percent down payment is implemented, 58 percent of the United States real estate market will make house purchase cheaper than renting out. Home appreciation prices are outpacing rental statistics, still getting the market's 55 percent, while rental price increase is outpacing week wage income in the market's 57 percent.
In the sample population, the study was able to find out that:
- Rentals that have three bedrooms are more likely to increase by 3.5 percent this year.
- The average home prices were recorded to be five percent in the third quarter of 2015, if compared two years ago.
- 2015's second quarter wages have increased by 2.6 percent from 2014.
- Montana, Louisiana, North Carolina, and South Carolina are those that have the biggest rental increases.
- Oregon, New York, Maryland, Texas, and Tennessee are the states that have experienced the biggest rental decreases.
With the examined U.S. markets, the study was able to find out that on an average, wage earners are more likely to spend 37 percent of their compensation on rental properties that have three bedrooms.
The market trend says that rent takes away the biggest portion of monthly incomes, averaging 60 percent of the total monthly compensation, in people living in: San Francisco, Santa Cruz, Northern California, New York City, Washington, D.C., and Honolulu.
Markets that are expected to take affordable rental rates that constitute a small amount of the income, include: Pennsylvania, Georgia, Iowa, Illinois, and Alabama.
As rental prices are increasing constantly, landlords must have the ability to look for good returns; however, they will have to deal with expensive properties which may continue to rise within the year. Whether the millennial population, which is known to jump to homeownership slowly, will finally be joining the bandwagon and will start to buy properties this year, is still to be discovered.