Breaking the Rental Cycle

Several of the United States’ most populous metro areas have more rental households than owner households. Many tenants today are renters-by-choice, as more and more Americans are delaying the process of homeownership. While the job market is growing, pay isn’t necessarily increasing, leading more people to find renting more affordable than buying a home.¹

Millennials and Gen-Z are moving out of their parents’ houses and creating new households. These two groups are driving a large portion of the rental market as they navigate the workforce and lack confidence in buying a home. Student debt and the job market are primary factors that have pushed this generation toward rental housing. While the sale of homes is predicted to continue an upward trend, many renters are staying put and renewing leases without planning a large home purchase in the near term.² Investors snatched up good deals after the housing crisis in 2008, and those property owners are now benefiting as appreciation and rental rates continue to rise.

As the renter pool grows, market rental rates continue to rise in major U.S. cities, with housing availability becoming a premium. Rental prices are influenced by what people are willing to pay and affordable housing mandates like Section 8. Typically, rental fees are all-inclusive, covering costs such as landscaping, utilities, and sometimes furnishings. Security deposits are standard, and additional fees may apply for pets or various services like lock changes and move-ins. These hidden fees can surprise tenants and add to the cost of securing a rental. Due to high demand, property owners and managers can charge extra fees, which renters often pay to secure housing.
 

Breaking Out of the Rental Cycle with the Help of Mortgage Bankers

For those looking to break out of the rental cycle and buy their first home, mortgage bankers can be a crucial ally. They help potential homeowners navigate the complexities of obtaining a mortgage, which can make homeownership more accessible. Here’s how mortgage bankers can assist:

• Loan Options and Pre-Approval: Mortgage bankers can help you understand the different loan options available and get you pre-approved for a mortgage, giving you a clear idea of your budget and strengthening your position as a buyer.
• Financial Guidance: They provide expert advice on improving your credit score and managing your finances to qualify for better loan terms.
• Navigating the Process: Mortgage bankers guide you through the entire mortgage process, from application to closing, ensuring you understand each step and helping you avoid common pitfalls.
• Access to Resources: They often have access to various financial products and can help you find programs for first-time homebuyers, such as lower down payment options or government-backed loans.
• Personalized Service: By working closely with you, mortgage bankers can tailor their services to meet your specific needs, making the transition from renting to owning smoother and more manageable.

By leveraging the expertise of a trusted mortgage banker, renters can take significant steps toward homeownership, breaking free from the rental cycle and investing in their future.