Are you one of the many renters who are now pondering your housing options for the time after your current lease expires? It is essential that you have a solid understanding of the real expenses involved in renting in the year 2022 before you make any decisions regarding your housing situation.
You, as a tenant, should be aware that rents have been steadily increasing since 1988. In 2021, rentals increased significantly. ApartmentList reports that since January 2021:
"The national median rent has risen by an astounding 17.8 percent. In comparison, rent increase from January to November in the pre-pandemic years of 2017-2019 averaged just 2.6%."
This rise in 2021 was significantly more than the average rent increase in prior years. In other words, rents are rapidly increasing. And realtor's 2022 National Housing Forecast predicts that unoccupied unit values will continue to rise this year:
"In 2022, we anticipate that this tendency will persist and underpin rent rise. Nationally, we anticipate a rent increase of 7.1% over the next 12 months, slightly outpacing home price increases."
Therefore, if you want to move into a new rental this year, you will likely spend far more than in previous years.
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If you're a tenant facing increased rent, you may be wondering what your options are. Consider homeownership if so. One of the numerous advantages of homeownership is that you may lock in a predictable monthly payment for the length of your loan.
According to National Association of Realtors (NAR) Chief Economist Lawrence Yun:
“. . . fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
If you plan to relocate this year, locking in your monthly housing bills for 15 to 30 years might be a significant benefit. You won't have to worry if you need to change your budget to allow for yearly inflation.
Homeowners also have the additional benefit of home equity, which has expanded significantly in recent years. In fact, according to CoreLogic's most recent Homeowner Equity Insight study, the average homeowner earned $56,700 in equity over the past year. Your rent simply covers the expense of your housing as a tenant. When you pay your mortgage, your wealth increases due to the forced savings represented by your home equity.
It is important to take into consideration the actual costs involved if you are considering moving into rented housing this year. Get in touch with a real estate professional in your area to find out how you can take the first step toward becoming a homeowner right away.
