Why You Should Buy A House Right Now And Not Wait

Today we are going to discover what’s happening with the housing market and why you should buy a house or invest in real estate right now and not wait until tomorrow or another year because you may think that the housing prices may fall soon.  Well, it doesn’t seem like it’s going to fall anytime soon. 

The housing prices in Florida got reset, same thing in California, the market does reset, but the rental prices are always going upward. Same thing in New York.

An article from The Wall Street Journal talks about how for some millennials, getting the chance to buy a starter home is hard to find. Why is that? “The shortage of available starter homes feels like yet another hurdle blocking some millennials’ path through traditional money milestones.” These kinds of houses allow young homeowners to build wealth and upsize as they start their families.

Starter homes for Millenials – Buy a house

The supply of “entry-level housing” which Freddie Mac’s defines as homes on their 1400 square feet, it’s at a five-decade low.” For the past 50 years, that means that the supply of entry-level housing has been at its lowest point according to Freddie Mac

Typically those loans are backed by companies like Freddie Mac. That’s just to give you an idea of what the role is on the mortgage and the housing industry. They do a lot more than that, but that’s what they’re typically known for.

Ed Pinto, director of the AEI housing Center at the American Enterprise Institute said that there just aren’t enough of these homes to fulfill the demands. “It’s creating this ‘Great American Land Rush‘ as they call it. People are moving around and there’s tremendous demand, but the inventory is down.” That’s what’s driving the prices up, and the longer you wait, the higher the prices are going to become.

“As of 2020, the median age of a first-time homebuyer was 33 years old, up from 30 years old a decade ago, according to the National Association of Realtors.” Why is this important? You might be wondering. That means that there’s a three-year gap. There’s a three-year gap before this family of 30-year or versus 33-year-old can even think about affording a house because they were getting outbid by people with more money.

That means there’s a larger audience that you can cater to. About a decade ago, you would see a higher demand in rentals for people up to 30 years old. Now the pool has increased to include people that are up to 33 years old. You have now three years’ worth of rental income that you could be getting yourself by just simply investing in real estate and providing housing to these families who are not able to get access to housing.

Another reason why you should buy a house now: Affordable Housing

For most people when they hear affordable housing, there is an instant negative reaction. They think ‘oh, low income’. The issue now is that these fissures have not just invaded the middle class. It’s now going up into the upper-middle-income strata. That’s why you need to be able to provide a solution because you as a real estate investor are able to provide housing to new families.

buy a house in USA
Lately, data from the National Association of Home Builders showed, new construction is again given priority to single-family homes.

There is lots and lots of migration going on. For people who are fortunate enough to still work from home, they are demanding larger houses. That’s where all the home builders are concentrating their efforts and providing larger houses. That means that if their attention is focused on building larger homes, they’re not going to have their attention focused on smaller homes, which translate to less and less supply of smaller homes that translate to more and more people needing to rent the properties because there’s not enough supplies of smaller homes in the market.

When are the prices going down? – Buy a house

Some house hunters feel they might soon have to find a rental that can bridge the gap or simply save their energy so that they can resume looking when prices cool off. When is that going to be? We can’t know yet. It could take a year or two or even three.

Remember even if the builders are starting to build their homes, they’re not concentrating on those smaller homes, they’re concentrated on the larger ones. This is where you come in and provide housing for these families who will eventually wind up renting from you or from any other investor out there.

Another article titled ‘Apartment Rents Increase as Young Workers Head Back to Cities’ Landlord stocks are up big this year, as rental market exceeds expectations in places like Atlanta. Apartment runs and home prices have been rising in cities like Atlanta over the past year. 

Young professionals are returning to the big cities

Apartment rents are rising fast, boosted by young professionals returning to cities and an expensive housing market that keeps many of them renting.

For those who are actually afraid that if they buy a house, they might not be able to rent it because there’s no demand or because of the whole forbearance, this article is going to help you get rid of all those fears. 

Stock prices of publicly traded apartment companies have jumped in stride. The FTSE Nareit Equity Apartments index which tracks these landlords, is up 42% since January, trouncing the S&P 500’s 17% gain during the same period.

buy a house
After the worst point of the pandemic, young professionals are returning to their big cities.

There’s multiple ways to invest in real estate. One is by investing in real estate through the stock market. The other one is just by simply buying properties and making them available for renters. 

March 2020 was a month where the country came to a stop. COVID was here, we had to stay in our homes, wear masks. After all that until today, the median rent has risen 9.4% above where the prices were back in March 2020.

That’s a demand, there’s a big jump. One big factor behind the recent increase: Soaring housing prices are forcing many would-be home buyers out of the for-sale market, and they have had little choice but to pay up for rent. As of June, median existing-home sales prices are up 23.4% from a year earlier to 363,300 which is a record high according to the National Association of Realtors.

Job losses at the beginning of the pandemic initially hurt rent collections. Occupancy rates drop to new lows for some landlords. But in nearly every major metro area, rents are now much higher. Rents are now much higher than they were a year ago. New York and San Francisco rents have begun to recover without having to lure tenants with free rent or other incentives so often anymore. Most market-rate renters have remained employed during the pandemic and continue making their monthly payments. 

Demand for rental apartments

Young professionals who were living with their parents are being called back to their employers or who feel more secure, and now they’re going to rent. In this case, they are renting because most of them don’t have the possibility to buy a house at this time.  

The pandemic had a lot of people either had to downsize or a lot of them had to move back with their parents. Now, they’re moving back out because their employer wants them back in the office. What are they going to do? You’re going to either quit or just look for another job that allows you to work from home. In this scenario, most of them are choosing to go back to work and with that comes more demand for rentals.

“Apartment new owner UDR Inc. noted in a June investor presentation that tenants aged 25 to 29, and now 30 to 34 now comprise a larger share of their client base than they did before the pandemic. The company hit an all-time high occupancy rate of 97.5%, a chief executive during the July earnings call.” This shows what the reality is now after some months of a worrying situation in the rental numbers.

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