Baseball, apple pie, and homeownership–these have historically been America’s three pillars of lifestyle or at least America’s agreed picture. But, in fact, times are changing. Throughout recent years, homeownership rates have declined and rentals have taken over more of the market. “Single-family rentals,” for instance, “of individual homes or semi-detached townhouses, in particular, have seen a growth rate of 30 percent in recent years.” The factors driving this trend are both personal and economic. So let’s see why people prefer to rent in Houston as opposed to buying a home.
Mortgage Qualification Challenges
Because of the cold, hard fact of the obstacles and difficulties they face in applying for a mortgage, many people today prefer to rent vs. buying a home in Houston. Fewer people will meet the qualifying criteria in today’s economy, such as good credit, stable employment, and the ability to make an down payment. “Checking every box,” according to financial experts, “may be more complicated than it has been in the past before applying for a home loan.”
Today that last thing is becoming more and more relevant. “Increasing prices in the housing market can also create an infinite loop. In many parts of the country, rents have risen rapidly, outperforming incomes. It makes it harder for people to save a down payment to buy a home, leading to renting more households.
Another reason people prefer to rent vs. buying a house in Houston is the fact that renting is significantly cheaper upfront. If you have reasonably good credit, for just the first month’s rent and a security deposit, you can get into a decent rent. Yet buying a house includes a down payment of 20 percent, and if you don’t have that much, you will have to pay for private mortgage insurance. And then you will have expense of closure, property taxes, and many other expenses – all of which are beyond the control of many people. Add to that college debt pressures and rising rents, and it’s easy to see why more people can never afford the initial cost of buying a home.
In addition to more upfront costs, homeownership carries ongoing expenses, particularly for insurance, property taxes, and repairs and repair. “A house could be a drain in time and money. You’re stuck with paying for each cost if you own it. Typically, renters can rely on the landlord to maintain the property in general, and most of the large expenses are included in the rental fee. Even if you’re renting a single-family home where you’re responsible for the property’s general maintenance, you’re still not going to have to worry about major expenses like repairing the roof needs.
Many people prefer renting vs. buying a house in Houston because of the renting affords for lifestyle versatility. Today, many people are moving more and changing jobs more often. Renting helps them to do that because house and mortgage are not tied. For particular, Millennials prefer to spend their disposable income on things like travel and entertainment rather than building equity in a home.
More Investment Opportunities
Because home ownership is no longer seen in the same light as an investment, renting allows people to invest elsewhere instead of buying in Houston. Financial experts suggest considering “the expense of placing your capital in a house rather than other investments that would make more money. Because home ownership is no longer seen in the same light as an investment, renting allows people to invest elsewhere instead of buying in Houston. Financial experts suggest considering “the cost of putting your capital in a house rather than other investments that might make more money.
Loss of Tax Advantages
The recent changes in the tax code have caused other people to choose to rent in Houston as opposed to buying a home. Homeownership’s tax benefits just aren’t what they were. There has been a reduction in tax deductions for state and local property taxes, which really affects people living in high-tax states. Looking at the higher upfront costs and continuing ownership expenditures, reducing those tax breaks makes renting more economically viable.
So why do more and more people choose to rent in Houston as opposed to buying a house? They’re doing this because they’re too financially strapped for ownership, they don’t want the ongoing expenses, they want the opportunity to rent, and/or they’d prefer to spend elsewhere. The reasons are personal as well as political, and the reasons are all positive. Are you ready to purchase a house in Houston and enjoy the benefits of renting vs. If so, find out how you can get started with our professional real estate agents.