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Rents Rising Faster Than Home Values
Renting is more expensive and not as affordable as buying a home right now, and the gap is only going to increase.Rents nationally rose 4% in April, in comparison, home values have only increase by 3% year after year.
One result: Renters who were considering buying are now taking that first step.Although millennials are expected to be the largest home-buying group in 2015, many first-time buyers are older.
The last time this happened, it went on for a while — but the situation was considerably different.
In the wake of the housing bust, home values declined before rebounding. Rents, maintaining steady growth, easily stayed ahead.
That changed in April 2013, when home values finally heated up enough to pass rents. By April 2014, home values were sprinting at 8.8 percent year-over-year, while rent gains remained steady between 2 percent and 3 percent on an annual basis.
Now home values are cooling off, while rents pick up a little — and that’s enough for the tortoise to pass the hare.
For more information about rents and home values, visit Zillow Research or follow and ask questions of Zillow Chief Economist @StanHumphries on Twitter.
Read the full article on Zillow.com
http://www.zillow.com/blog/rents-vs-homes-values-176508/
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