If you fear that you may never be able to afford a home, then you’re not alone. According to National Association of Realtors (NAR) chief economist Lawrence Yun, “People who are currently renting and want to convert into ownership [are facing] major difficulty” due to quickly-rising home prices and slowly-rising (or stagnant) wages. Yun added, “What happens when the rates begin to rise?” and noted that affordability is the main contributing factor to the relatively slow national housing recovery.
“While housing should be pushing overall economic growth, it is not, due to the meager activity in home construction,” said Diana Olick in response to the same numbers. She noted that rental demand is fueling construction activity, but that the single-family home inventory is still quite tight. Olick also noted that multifamily housing starts are also likely to slow in coming months because the supply for “higher-priced, urban rentals…is now high.”
While the experts certainly don’t have the brightest outlook on the housing market these days, the good news for real estate investors is that there is a ready, willing, and eager market hoping to buy but presently priced out of conventional home purchases. Buying options that allow for creative financing could open up an entirely new buyers’ market for investors willing to work with buyers looking for lease-options, subject-to options, and seller financing.
When the market becomes unaffordable, get creative to get in.
Point to Ponder:
Are you concerned about the lack of affordability in our national housing market?
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Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.