Real Estate Market Shift: Homeowners are Looking to Rent
It’s the American dream, right? You get married, buy a little house, start a family and put up a picket fence, then get your kids a sweet little puppy to learn responsibility. From there, you get a raise, maybe a promotion, and then you buy a bigger house, one that’s got a little more space and a little bigger mortgage payment. In decades past, this cycle was fairly predictable. When people grew up they purchased a home.
For older generations of Americans, this absolutely was the way of life. Based on percentage, people over 40 are considerably more likely to own their home. As people get older, they’re even more likely to own their own home (up to a point, at least..homeownership rates begin to fall again in demographics 70 years old and older). However, the number of people who are choosing to purchase a home is falling.
Since the mid-2000s, decreases in home affordability are driving people off from what was once a given. With less people purchasing homes, it follows that more people are renting homes. Since 2011, rental rates have been rising by approximately 1.6% per year, making the number of renting households an astounding 46 million as of last year.
Most notably, the number of people over 35 who are renting their homes is increasing, too. That figure indicates that people are actually selling their homes in order to rent.
Why is this? Likely culprits are the housing market crash in the early 2000s. That crisis made people a lot less sure of whether their home was quite the investment they had always been told. Another cause may be that though housing prices are rising, pay rates aren’t rising fast enough to keep up. Our culture today puts more emphasis on getting out of debt or not getting into it in the first place, as well. It’s become a chic idea to ditch the credit cards and unwieldy loans, allowing middle class people in that middle-aged demographic to feel less obligated to purchase a home.
If they already own a home but are looking to shed the responsibilities that go along with homeownership and become renters, there’s a way that the estimated million homeowners turned renters over the next four years could have their cake and eat it, too, and that’s probably music to their ears. They could skip out on the hassles of homeownership and become renters, all without packing a single box or changing their address.
Sell and Stay: It’s a residential sale leaseback agreement where the homeowner sells their home, but with a lease agreement stating that they can continue living there, renting the home at fair market value instead of owning it. For homeowners with homes valued between $100k and $250k, Easyknock’s Sell and Stay program might be right for you.
Who Else Might Benefit from Sell and Stay?
Another demographic for whom Sell and Stay might work is reverse mortgage or home equity loan applicants who were turned down for those programs. It works for people who need access to the equity in their home, too, and it’s certainly a viable alternative for anyone shot down for either of those loan programs. Whatever your situation, if you own your own home and you have good reason not to anymore, but you don’t want to move, it’s an option worth exploring.