Buying a house is a dream for many! Owning a house has its charm and comfort. Many people want to own a house but later find out that they don’t have enough money and miss the requirements that many banks have because of things they can’t control. Home Equity Partner provides alternative solutions for individuals and families in these situations. Here are some trends that 2021 might have in store for anyone looking to buy a home using the rent-to-own, lease-to-own, or contract for deed methods.
It’s no secret that the COVID-19 pandemic threw a wrench in every single industry, creating unpredictable ups and downs as everyone raced to protect their health and their jobs in 2020. The real estate market was certainly in this same boat with record-low mortgage rates but also record low inventory.
“In the first quarter of 2020, 88.6% of housing units in the U.S. were occupied and 11.4% were vacant 6.6% of rentals were vacant compared to 1.1% of homeowner-occupied housing. As of the first quarter of 2020, the homeownership rate in the US was 65.3%, an increase of 64.2% from the first quarter of 2019” – ipropertymanagement.com
#1. COVID Effects On Home Buying Include Higher Home Prices And Poor Credit
While mortgages are at an all-time low, many home buyers can’t take advantage of the deal because COVID has wreaked havoc on their credit scores. Agents are saying sales will be up 7% in 2021, but that doesn’t mean some people won’t be left out in the cold.
Temporary or long-lasting joblessness, reduced hours, and other factors caused many people to fall behind on mortgage, rent, utilities, car, and credit card payments for months on end. With weakened credit scores, even once they are back on track and ready to buy a home again in 2021, they will have little luck getting a new mortgage. This is going to cause a rise in renting and rent-to-own situations.
#2. Millennials Homeownership On The Rise But Here Comes Gen Z
Millennials got a bad reputation for being a “generation of renters,” but they’ve started to turn that around. They are not the fastest-growing group of homeowners. The housing market crash in 2007-2008 hit millennials hard and dropped their homeownership rate to only 43%, far lower than Gen X (67%) and Boomers (77.3%).
Gen Z is coming into their own, however, and they will have little money saved for down payments and nothing to leverage, creating a rough barrier of entry into the housing market. They are also being crushed under the weight of student loan debt, much like the millennials before them. They are also the gig economy generation, consisting of many contracted employees and freelancers. Having high debt, few assets, and a unique job type will all make them likely candidates for a rent-to-own situation.
#3. Rent-To-Own Rebuilds Itself With Transparency And Digital Options
New rent-to-own real estate companies are trashing their predecessor’s bad reputations and creating trust through transparency in new rent-to-own and contract-for-deed deals. Real Estate companies watch trends carefully and hope to fill in the gaps where necessary, making it easier for anyone to own their own home. Modern agencies are doing most of their deals digitally using websites and apps, allowing renters to find their own homes and purchasing them to create the rent-to-own partnership. Having online options will attract the newest generation of potential home buyers.
We will still be battling COVID-19 well into 2021, and its effects will last several more years after that. While some people will have a diminished chance of obtaining a mortgage, many will regain their jobs and be ready to move into houses with a little help. It’s likely that rent-to-own home-buying will become more popular in the coming months than ever before.
Due to Covid-19 and economic conditions, we have seen a decrease in many housing markets across the country. Winter and ending tax seasons can also bring down prices in certain parts of the country down. Volatility brings opportunity for individuals and families to get into a rent-to-own or contract for deed home.
It is common for houses to be lower so they sell before the end of the year for many tax reasons. These housing prices commonly carry into the first part of the next year. Savings for you long-term.
This is a great opportunity for people looking to lock in a lower home price with a lease-to-own or contract for deed. Bankrate recently compiled a list of the five states with the strongest housing economies during the coronavirus based on home appreciation, job growth, cost of living and taxes. It breaks down the financial incentives and projections of these desirable markets and compares them to the alternatively slower housing markets in the country.