Rental Prices Raise Even As Inventory Tightens

The number of Americans renting is on the rise, but so are rental prices.  According to a recent CoreLogic study, the number of Americans renting single-family homes has increased by 12 percent since 2011 while the number of rental homes on the market has decreased in some states. This is causing an uptick in rental prices.

CoreLogic expects rental prices to continue to rise throughout the rest of this year and next…The ratio between listing rent and actual rent paid is another indicator that points to a tightening in the single-family rental market. Two years ago when rental prices were declining and inventory was higher, the spread was about 4 percent. Today it stands at about 2 percent. (source)

Buying a home has always been a smarter long-term strategy than renting, but that’s even more true in a market with rising rental prices. Renters who want to become homeowners should begin by assessing if it will be cheaper to buy.  If it is, then improving your credit rating is first step to accessing the best interest rates. Right now mortgage interest rates are at historically low levels, but lenders have become discerning.  The foreclosure crisis spooked many mortgage companies making them more cautious with borrowers who appear to be a serious credit risk.  Get on the lender’s preferred borrower’s list by improving your credit rating and increasing your down payment amount.

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