I saw on article on the NPR website that was actually an interview between David Greene (show host) and David Wessel, Director of the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution. According to Wessel, the number of renters increased by 2 million while the number of families that owned homes decreased by 400,000 in the last year. More people are wanting to rent these days, but not enough rental units are being built to handle the demand.
Why are more people renting? Wessel says that one of the reasons is that a lot of people are still scared to buy a home after seeing how fragile the market can be. For some, it has to be tough to get back in the game after losing money on a seemingly safe investment such as a home. Wessel goes on to say that recent college graduates are not yet secure enough in their jobs to feel comfortable taking on the risk of a mortgage. College grads may also be burdened with student loan debt, which could cause them to be cash poor or have a less than stellar credit rating.
I also think that many people these days simply don’t care of they own their own home. Maybe the American dream isn’t as coveted as it used to be, especially since the housing market can clearly be as volatile as other markets. Maybe people are more comfortable putting their money in safer investment products. I have to say that it does sound nice to not have to pay maintenance costs associated with owning a home.
This high demand/low supply of rental homes is certainly affecting the market in Boca Raton, Florida. There are 3 bedroom, 2 bath houses in middle-class neighborhoods listed on the MLS from $4800.00 to $8500.00 per month. The specific neighborhoods I am referring to are Boca Square, Lake Floresta Park. Mizner Forest, and Old Floresta. I didn’t even see anything available for rest in the nearby neighborhoods of Camino Gardens, Palm Beach Farms, and Carriage Hill.