The age-old American wisdom of, “you can’t go wrong buying a home” is shifting. According to the Urban Institute, nearly all housing demand in recent years has been filled with rentals, and single-family rentals are up 30% in the last three years. This obviously has a huge effect on the housing market. What’s happening here? Is renting outpacing buying in real estate? The roots of this shift can be found in two places: the housing collapse and recession that followed, and, strangely, the one thing that hasn’t bounced back in the post-recession recovery: American’s desire to own a home.
Behind the Renting Trend Nationally:
The target age for single-family home buyers is currently comprised of young adults who came of age during the housing bubble in the previous decade. Saddled with student loans and a shifting job market, it’s harder than ever to save up for a down payment. Renting lowers the commitment and enables young adults and their families to move where they find work quickly.
Another demographic contributing to this trend are Americans over 55. According to RENTCafé, the number of renters who are 55 years or older has increased 28% between 2009 and 2015. That’s a huge jump! For this population, they prefer renting homes over apartments.
These two population factors, coupled with economic factors that affected home ownership, created a market for institutional investors to purchase homes that had been foreclosed on during the housing bust and turn them into cash-generating rentals. Frequently these homes were rented out by families who had lost their homes or could no longer qualify for a mortgage. As the housing recovery has progressed, this trend shifted away from institutional investors and toward smaller landlords – property owners with fewer than ten rentals.
Eastern Panhandle: Is Renting Outpacing Buying Locally?
Based on sale data, it seems that our region is still a healthy market for home ownership. 2015 City-Data’s information about Martinsburg states that out of 7,423 homes, 6,676 of those were occupied. Out of those occupied 6,676 homes, 3,253 were owner occupied, and 3,655 were renter occupied. Single-family home rentals edge out ownership with 53% of homes being rented. The median price of a home is currently $185,000. Whether you are looking to own for your occupancy or to purchase an investment property for rental, the market is in good shape to support either option.
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