As the unemployment rates decreases and the economy continues on a slow but steady road toward recovery, many Americans have taken the step to renting apartments as opposed to purchasing new or foreclosed properties. As more people move toward renting again, the real estate market continues to suffer. One reason for the move to renting as opposed to purchasing involves the ridiculous standards lenders are placing on those wishing to finance houses. However, this is only part of the problem.
Survey results indicate that those gaining jobs and therefore decreasing the unemployment rate tend to be between 20 and 35 years-old. With this age range, especially the lower end, there is an inability to obtain a home loan due to a lack of credit history and an inability to make a substantial down payment. As a result, those gaining jobs are looking more to apartments because they feel unable to buy in such a rough housing market.
However, as there are growing demands for rental spaces, apartment complexes are likely to increase their rent, making it much easier for people to afford mortgage rates on their own home in comparison to monthly rent. This increase in apartment rent may encourage more established professionals to purchase their own homes as opposed to dealing with an increase in rent at their current apartment or condominium.
One thing is certain, even though many people desire to make home purchases while interest rates are low and properties are incredibly cheap, especially foreclosed homes, they are finding it very difficult to move from renting to buying due to a lack of savings, inability to receive financing, and a high unemployment rate. Before the market will recover, lenders have to reduce their incredibly high standards, buyers will have to see the benefits of buying as opposed to renting, and the job market has to continue to grow. It appears as though the housing market will continue a very slow return to stability, especially with all of the conflicting factors still being ever-present.
