Zillow is predicting some noteworthy shifts in the rental market for 2017. The competition for rentals on the North Shore has been stiff for the past few years and it will be interesting to see if any of these predications are going to make things easier or harder for renters in our area.
While home ownership has been stagnant for the past few years, we should expect that to change as the “millennials” (average age of 33) start getting older. For the past 11 years’ home ownership has dropped while most new households have been rentals. It looks like this trend is going to fall by the wayside as millennials get older and approach major life events such as getting married and starting to have children. Call the millennials old fashion but they are still striving for the American Dream of home ownership.
Another factor affecting the rental market will be construction costs. The cost of materials and the scarcity of new land to build on in our area is going to drive the final costs up. Forcing many builders to focus on the more attractive profit margins of higher end homes. The cost of building is set to increase due to potential labor shortages, as immigration policies tighten in the US, the potential loss of 10-20% of the single-family construction labor force could also drive up wages.
After years of amazingly attractive mortgage rates, economists are expecting the them to rise. Falling unemployment rates and moderate wage growth has the Fed wanting to act. The new administration is hoping to keep rates down so it will be interesting to see who prevails.
To say the least there are numerous factors, I have mentioned only three, that could affect the housing markets in the next 12-18 months. If you would like to know more about renting vs. buying please feel free to e-mail me HERE.