Wednesday, July 29, 2015

Why Rents Will Keep Rising; and Is Buying a Home a Good Investment? (5 Charts)

"Continuing with the US economy, the country's rental crisis is worsening. Here are two charts that tell us why rental costs will continue to rise sharply.

1. Growth in US households is now at pre-recession levels, driving demand for housing.

Source: @SoberLook, US Census Bureau

2. At the same time rental vacancies continue to slide - now at levels we haven't seen in some 30 years.

We continue to see ongoing shift away from homeownership as the homeownership rate declines.

Moreover, this trend is quite clear in the numbers of US rental vs owner occupied housing units (note that the housing correction started in 2006).

Part of the unease with US homeownership is the fact that if you bought a house 10 years ago, you would just be breaking even (on average). Add to that inflation, maintenance, etc. and it makes for a really bad investment. Of course the tightness in the mortgage market isn't helping."


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