Win + Win

February 22, 2017 by Meg Decker

It seems like “win-win situations” are talked about often, but rarely achieved.  When it comes to things like making money, saving and building up wealth, it also often seems that it’s always easiest for the people who already have money to make more.  We’re in a very interesting crossroads for the real estate market – downtown Minneapolis and nationwide – where we really do have win-win opportunities for renters AND homeowners.

 

Here’s the situation in a nutshell according to independent economics research and consulting firm Pulsenomics:

 

The percentage of a U.S. consumer’s income required to afford median RENT has gone up while the percentage required to afford and OWN a median-priced home has gone down.

 

The Pulsenomics report says rent has historically cost 26% of income, compared to 30% today.  Income required to purchase a home has dropped from the historic average of 21% to 15% today.  So renting has basically gone up 4% while homeownership has come down 6%.  Of course, this is a very simplified explanation of the stats and everyone’s situation is different and the numbers can vary in geographic and higher cost and demand areas.

 

The takeaway is this:  Renters have a better-than-typical opportunity to get into homes with a smaller chunk of their incomes than historically average.  The larger percentage of income required to buy makes it harder for people – especially those buying for the first time – to purchase a home of their own.  Homeowners can also benefit from the market conditions in a couple of ways, by choosing to move up to a different home or buy a second home or investment properties because of great buying opportunities and the ability to take advantage of an above-average rental market.

 

There are ways for current renters and homeowners to win under today’s market conditions.  The question is, what is possible and what makes sense for you?  We can help you consider different scenarios.  It’s truly an exciting time!  Let’s see how these win-win conditions might benefit you!

 

 

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