As the cost of rent in the Charlotte area continues to rise, more millennials are now becoming interested in purchasing a home rather than continuing to rent.
Last month, annual rent increases that occurred throughout the United States were greater than the increases in home prices. This is the first time in at least five years that rental costs went up more than home prices, and individuals are taking notice as they figure out their living situations.
The harsh reality for many millennials is that rents just keep going up. It is actually predicted that rates will increase by about 4% for those who are renewing their leases, and new apartment tenants can expect to pay around 5.7% more than previous occupants.
According to Bloomberg, approximately 5.2 million renters are planning on purchasing a home in 2015, compared to 4.2 million in 2014. As the economy continues to improve, young people are able to find job security and begin saving for a down payment on a home. Once they are able to save enough for a respectable down payment, it is an easy decision to put their money towards a mortgage each month rather than an ever-increasing apartment that they will never actually own.
The outcome of these rent increases is that real estate agents in Charlotte and across the country can expect to have more clients in their 20s and early 30s reaching out. In recent years, millennials have been in no hurry to purchase real estate. They have not had job security, many are faced with student loans and a vast majority is waiting until later in life to settle down and start a family. Most significantly, renting an apartment has typically been a cost-effective and easy option. Until now.
If you are going to spend $1,000-$1,500 each month on your living quarters, it makes more sense to build some equity in the process. To sum things up, it is time for Charlotte renters to evaluate their situations, run the numbers and see if buying makes more sense than renting.