The decline in home ownership can be a boon for investors experienced
With the housing market starts to cool, and interest is growing, can be an excellent time for investors to buy rental properties. The combination of these two factors in the market, together with an increase in the number of people looking for new homes, a great victory for common sense to play real estate.
In the second quarter of 2006, the homeownership rate has actually increased slightly to 68.7 percent (although it was less than half a percentage point), but this figure is more thanthan one percentage point from the highest point that occurred in the second quarter of 2004 (69.2 percent). While there may be good for sellers of property, current interest rates, combined with a strong increase in real estate during the housing boom in many parts of the country experienced in recent years has made it much more difficult for buyers to enter home.
What does it mean for investors? This means that even during the peak of home ownership in2004, with more than 3 in 10 Americans still rented homes where they lived, and it seems that this figure could rise. In the last week of July 2006, Mortgage Bankers Association reported that loan applications from one to four-year low was reached. As an investor, these figures should spark your interest, because it shows that more people are forced to rent, whether you like it or not, until market factors adjust to homeownershipmore feasible.
That fact is conveyed in a recent survey by the National Multi Housing Council, which found that about 75 percent of managers reported lower apartment vacancies, rents higher, or both. Indeed, the study found that the degree "of market indices used to measure the rental terms of the market, rose to 85 in the second quarter of 2006, which was the highest number ever recorded. Any number above 50 on this scale indicates an improvement in market conditionsowners and is top 50 for 12 consecutive quarters. (The last time was less than 50 was in July 2003.)
All these factors give a clear indication that owns a rental property makes more sense than it had in a long time and this trend appears to continue for some time to come. This conclusion is verified when a study of Harvard University has a number of demographic forces, which together promote rental housing market, especially echo boomers and identifiedsecond-generation Americans. The fact that investors have to pay higher interest rates to buy rental properties has also translated into increased rents over the past years.
With home buyers with more difficult to finance their dream home, it seems that the market rent will continue to strengthen for some time, at least until a market correction led to a fall in house prices, already soaring in recent years. As more and more people begin to seetaking as an option pending an improvement, so investors may be able to experience more profits by adding more holidays to their holdings.
Copyright © 2006 Jeanette J. Fisher
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