Rising Rent May Boost Housing Market

The floundering housing market, which included mass foreclosures and tightened lending policies changed the landscape of owners and renters. Suddenly hundreds of thousands of people were pushed out of their homes and found themselves in the world of rentals. Many young people, disillusioned by the housing crisis, simply opted for renting, believing that purchasing a home was too risky and did not offer enough incentives. Unfortunately, as more people flooded the rental market, lease rates began to climb. In 2011 alone, the total number of rental households grew by one million. Vacancy rates have also been plummeting, leaving fewer options available for renters.

Across the United States, marked increases have been noted in rental rates. According to a recent article on MSNBC, rental inflation has been experienced in every region of the country. The highest increase occured in the Northeast with a collective surge of 6.5 percent. San Franciso saw the highest jump with an increase of 11% in 2011.

These changes, combined with falling mortgage rates, significantly lower home prices and a recovering market outlook has led many people back to the buyers table. When you're spending several thousand per month on rent, purchasing begins to look significantly more appealing. The upsurge in buyers has also been noted with many Realtors observing homes selling within days of listing, multiple offers on properties and a growing shadow housing market. The number of available homes listed has also seen decreases with 20% fewer or 1.88 million homes less last month than the same month last year.

Investors might also recognize the value of purchasing during a time when the rental market is satiated. Owning rental property is quickly becoming a lucrative business again as rental rates rise and tenants become easier to find.

In East Lansing, we rarely see a draught in the rental market due to popular Michigan State University. From students to incoming faculty, East Lansing rental properties are valuable assets and I generally recommend any investors interested in owning income property in this area to begin with East Lansing. If you;'e thinking about purchasing a new home, investment property or selling the home that you currently own, contact me at MyRealtorRob.