High Rents Boost Home Sales Despite Low Affordability
It is projected that the economy will continue to grow throughout the rest of 2016, bringing increased household income and only small increases in mortgage rates. Unfortunately, this may not be enough to combat the declining affordability of homes. Low inventory continues to plague the market, driving up prices and inciting bidding wars on desirable units throughout the country.
Meanwhile, though the Millennial generation has thus far been slow to embrace homeownership, increasing home values have been inspiring young professionals to make the transition. As rents go up faster than income, it is getting more and more viable to take on a mortgage as an alternative. However, with over 60% of millennials working full-time earning less than the national median income of $46,480, this remains a dream that will remain frustrated for many would-be homeowners for a while yet.
The sustained demand for apartments has brought about an influx of apartment inventory. An increased number of units are added every year, more than sixty percent of which are rented within three months of completion.
