Renters Are Beginning To Be Affected By Depressed Housing Market

Renters Are Beginning To Be Affected By Depressed Housing Market

In some areas renters are also experiencing problems as a consequence of the housing market crash. This has been quite a surprise for many people because they thought they were immune to the housing crash because they had not taken out a mortgage. At the time, this seemed to be a safe strategy. Many people assumed they were doing the safe thing by waiting to buy a home until the housing market stabilized.

Many renters in some areas are quickly discovering they are not immune to housing problems after all. One of the most shared problems is the fact that while renters do not have a mortgage on their character, their landlords do have a mortgage. If the landlord is not able to make their monthly mortgage payments due to rising interest rates and adjustable rate mortgages, the rental character could very well go into foreclosure.

When that happens, renters could find themselves facing eviction. In some situations, renters have discovered they had only 30 days to leave similarities they had rented for quite some time. This has placed a tremendous amount of stress of many renters as they struggle to suddenly not only locate a new place to rent but also to come up with the cash necessary to make rental deposits.

In other situations renters have been affected by rapidly rising rental prices. Nationally, rental prices have begun to rise. Currently, the worse places to rent because of rising rental prices are San Francisco and New York. Seattle, San Jose and Cleveland are also showing signs of rising rental rates. San Bernardino and San Diego are not far behind, either.

One of the reasons that rents are rising in these locations is the fact that developers have not been able to construct as many new apartment buildings. In highly populous areas this has resulted in a large need with little supply. When supply is not able to keep up with the need, the natural consequence is rising prices. To make matters worse, rapidly increasing numbers of former homeowners are either selling their homes as a consequence of the housing crash or being forced out of their homes due to foreclosures. They must have someplace to go and renting is often the only viable option for these individuals and families, further increasing the need for rentals.

Overall, the national vacancy rate for rentals has declined more than 10% in the last four years, clearly suggesting that more people are renting similarities today than they were right before the housing expansion of 2005. Nationally, rents have also risen 14% over the same time period, as reported by the Census Bureau.

A number of factors have contributed to the rising rate of rental prices. One of the most important factors that have contributed to rising rental rates is the fact that more and more renters are waiting for the prices of homes to drop before they make the decision to buy. Many renters are assuming that home prices have not however hit the bottom. For these renters, it just simply does not make sense to buy right now. Quite simply, most renters do not want to find themselves in the same financial troubles that many homeowners have been placed under in the last two years.

There is also the fact that already buyers who would be willing to buy right now are simply not able to do so because of difficulty in qualify for affordable mortgages. Following the collapse of the subprime market, many lenders have tightened restrictions and now requesting not only good credit but excellent credit. Requirements for larger down payments have also increased, making it increasingly difficult for first-time home buyers to realize their dreams of home ownership.

The health of the rental market is being eyed with some concern due to the fact that the rental market truly has a strong impact on other sectors. The construction of apartment buildings, for example, is frequently affected by the health of the rental market.

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