People are increasingly choosing rent over home ownership – how can realtors adapt?
- Tips & Tricks
- 3 min read
The decennial census of 1890 was the first to ask people whether they owned or rented their home. Given the data available since then, and taking 1890 as the starting point, we can distinguish three somewhat distinct periods of homeownership in the US:
- The 1890-1940 period saw the homeownership rate fluctuating between 43% and 48%. The first three decades, though, were marked by a steady decline, kicked off by stagnant incomes due to immigration and urban sprawl. Just as things started looking up again, the fresh gains were ravaged by the Depression circa 1929.
- The 1940-1960 period was marked by an 18% rise in the homeownership rate (43.6% to 61.9%), fuelled by higher wartime incomes, the absence of competing consumer goods, and shortages of rental housing.
- The period that started around 1960 ushered in relative stability, punctured by a slight uptick in the homeownership rate beginning in 1994 and then falling off a cliff around the financial crisis of 2007-2008. In 2016, with the worst of the fallout safely in the past, things more or less went back to where they were before.
Today, however, as incomes stagnate and people struggle to remain employed in the face of a global pandemic, homeownership in the US is unlikely to start rallying anytime soon. Case in point, compared to early 2021, mortgage rates are up by 55%, and the median existing-home price hovers 15% above its former level ($357,300 vs. $310,600).
To make matters worse, over 90% of home builders now report delays and materials shortages due to the ongoing supply chain pandemonium. In addition, brokers at Redfin predict a historic decline in the number of available homes for sale in 2022.
While jacking up interest rates to 5.08% (2.67% in 2021) might help somewhat in stabilizing the red-hot market and slow down price growth, people are increasingly choosing rent over ownership.
As Roofstock’s Jeff Rhode put it a few months ago, “The build-to-rent home model has been one of the fastest-growing sectors of the U.S. housing market in 2019, according to Builder, with demand from renters and investors exceeding supply. […] Real estate investors know that the demand for good rental property is growing by leaps and bounds in many markets across the US”.
How can real estate agents adapt to a rental-focused market?
One of the defining features of a great real estate agent is the ability and willingness to go the extra mile. Arguably, the most obvious way of doing that is by sparing clients the headache of looking for quality goods and services all on their own. With the real estate client structure taking on new shape, it’s high time you made the most of your network.
Upon signing a rent deal, new inhabitants of a house or apartment often need a bevy of additional services. These include moving, home improvement and décor, lawn maintenance, storage, internet and cable, security, and more. And let’s not forget essentials like bedding products, furniture and lighting, household appliances, and… you name it!
Doing research for these online can be a real pain – we’ve all been there, haven’t we? Lucky for your clients, though, it doesn’t have to be this way anymore. Realthy is a depository of services that your clients might need and a platform for offers that can help you boost your professionalism.
How can Realthy help you help your clients?
With Realthy, all you have to do is sign up, select one of our hand-picked offers, and then send a referral link to your client. That’s it!
The client gets a high quality product or service, the service provider gets a new customer, and you get to further develop your reputation as a real estate professional capable of providing exceptional value – it’s a WIN-WIN-WIN!
You may also want to consider the Client Connect tool that sends advice-packed newsletters to your clients. Simply choose a plan relevant to your needs, add your clients’ email addresses, and we’ll take care of the rest for you.
There are two plans that you can choose from:
- “When a client is in the buying process” is perfect for clients about to purchase their dream home as it provides valuable advice on the home buying process
- “When a client is in the moving-in process” is tailored to renters struggling with getting settled in and needing additional services
Realthy was designed to help real estate professionals increase the value they’re able to create by providing clients with recommendations for the goods and services they actually need. And who knows – this may also net you some repeat clients once the housing market takes a turn for the better!
In the meantime, follow us for tips and expert advice that you can start applying today.