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Young Adults Are Avoiding Homeownership In Favor Of Renting Due To Economic Recession Concerns

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A large amount of young adults in the US are avoiding homeownership in favor of renting properties, according to new economic data reported by Forbes. Affordability for homes across the country has been consistently increasing, beyond that, the flexibility of renting makes young residents resilient to economic downturns. 

From the 1980s to the 2010s, the average age of first-time homebuyers was late twenties to early thirties. Now, according to the National Association of Realtors, the average age of first time homebuyers in 2024 was 38, an all-time high. NAR also reported that 33% of 27-year-olds owned their home in 2024, compared to 40% of baby boomers when they were 27.  

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First-time home buyers are currently facing high home prices and high mortgage rates. Even though housing affordability slightly improved last year, the supply of available homes continued to increase, showing a lack of transactions. 

Buyers can, and have, utilized the high supply of homes to negotiate lower pricing, however, the general trend is clear; young adults are embracing rentals and avoiding buying.

According to Forbes, lot of young adults opt for renting because they feel it gives them the flexibility they may need in the event of a potential recession. The Census Bureau reported that people who move to metropolitan areas for work tend to find more success than those who remain where they are while looking for a new job. 

The job market is particularly hard to break into in multiple sectors. Many renters are ready and willing to move in order to find the most well-paying job, and by renting instead of buying, they have the flexibility to continue to move should they need to change occupations again. 

The pandemic also caused a massive influx in remote working, which allows many renters to work for jobs that may be based outside of their city. Initially, this trend in working from home actually increased the amount of people who were buying homes, especially considering prices for homes dropped in many areas around the US during the pandemic as well. 

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However, now that we’re no longer living in quarantine, 30-year fixed mortgage rates have more than doubled what they were in 2021, according to reports. 

Young people are also paying great attention to climate change and the devastating impact it has on the economy. Due to the fact that young adults will experience more consequences of climate change than older people, they’re hesitant to make any housing investments due to the financial impact climate change will have in the future. 

The US also experienced a massive increase in the development of multi-family homes that remain vacant. This influx in available properties is actually causing landlords to avoid rental increases as a means of maintaining their tenants. 

“Household growth is slowing, which could mean less demand and lower prices for homes in the future. However, the uncertainty in the economy could continue to make the flexibility of renting more appealing than the commitment of homeownership,” Daryl Fairweather, a real estate contributor for Forbes, wrote

“When every election is the most critical election so far, and every year the nature of work shifts with the culture, and every year there’s a record breaking natural disaster, it’s hard to imagine young adults wanting to anchor themselves in place with homeownership.”

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The Netherlands Introduces Restrictions On Investors, Making Homeownership More Accessible 

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Some of the Netherlands largest cities have introduced restrictions on investors from renting out the real estate they buy as certain neighborhood populations change, increasing rent while house prices remain the same. 

As a means of making homeownership more accessible for middle-income households, the “Opkoopbescherming” (purchase protection) law strongly discourages investors from buying real estate, and states that any property with a value below a cap set by municipalities can’t be leased for four years after its purchase. 

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More than a year after this policy started, housing prices have yet to drop while rent prices are increasing with a smaller supply available. 

One of the main reasons the law was passed in the first place is because concerns were growing about investors driving up the real estate market by out-pricing home-buyers, and decreasing the livability in neighborhoods because tenants are more likely to stay for shorter periods of time.

According to Statistics Netherlands, house prices in the Netherlands have been regularly increasing, and prices of Dutch real estate grew by 13.4% in 2022, adding to a 15% growth from 2021. 

While the policy was drawn up at a national level, it’s up to municipalities to decide whether to implement the law. All Dutch cities with more than 200,000 residents introduced the investment-restriction policy in 2022. 

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The study regarding this law overall found that residents in the Netherlands would have a higher chance of buying homes in areas where real estate investors were not included. Nationwide, around 2,000 homes were sold to buyers, which otherwise would have been sold to investors. 

The research on the new law also showed, however, the absence of real estate investors hasn’t impacted rising home prices, meaning their investments may not contribute to price rises. 

According to Newsendip, Matthijs Korevaar, Assistant Professor at the Erasmus School of Economics, said that “investors usually have a more solid financial background – larger borrowing capacity, no resolutive conditions, etc. – which can give them an advantage in front of sellers compared to household buyers who need a high mortgage. Investors would pay similar prices but have better chances of buying a house thanks to their finances.”

The study also suggested that the ban on investors in certain areas has more so impacted the populations of a given neighborhood, as renters are normally younger, and homebuyers in the area are more often older and wealthier. 

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Billions In Renters Aid Still Available For Struggling Americans 

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Six months ago Congress allocated more than $45 billion to the renters’ crisis which was triggered by the Covid-19 pandemic. Most of that money is still available today, in fact, only about a fifth of it has been used so far. 

According to data from the US Department of Treasury, $10 billion of the funding reached households by the end of last month, meaning there’s still around $35 billion in aid unspent and ready to be used. 

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Around 12 million adults are currently behind on their rent payments, according to a recent report by the Center on Budget and Policy Priorities. One analysis over the summer found that the average American renter owed about $3,700, and in some areas rental debts were topping $10,000 per household. 

“There’s certainly remaining need in most states and cities. However, efforts to disburse the money have been challenged by a lack of awareness and cumbersome applications. Still, renters should not give up on getting the help.” said Diane Yentel, president and CEO of the National Low Income Housing Coalition.

Just applying for renters aid can help you stay in your home longer. In at least five states individuals who apply for assistance are entitled to some level of protection from being pushed out of their homes. 

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For renters who don’t know how to apply, The National Low Income Housing Coalition has a state-by-state list of more than 500 organizations that are currently giving out federal money. The Consumer Financial Protection Bureau also has a new online tool to help renters easily apply for the aid. 

To be eligible for the aid at least one member of your household has to qualify for unemployment benefits or attest in writing that they’ve lost income or incurred significant expenses due to the pandemic. 

There also needs to be a demonstrated risk of homelessness, which may include a past-due rent or utility notice. 

Additionally, your income level for 2020 can’t exceed 80% of your area’s median income, although some state’s have prioritized applicants who fall at 50% or lower, as well as those who have been unemployed for more than 90 days. 

You could potentially receive up to 18 months of assistance. If you’ve already been approved for rental funds but continue to be behind, you can reapply. If you are at risk of being evicted you can find low-cost or free legal help with an eviction in your state at Lawhelp.org.

Renting Clothes Is Less Sustainable Than Throwing Them Away, Study Finds

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A recent study performed by the Finnish scientific journal Environmental Research Letters has shown that renting clothes is actually worse for the planet than just throwing them away. Before, renting clothes was thought to be one of the easier solutions when it comes to the sustainability issues the fashion industry has. 

The study specifically looked at the environmental impact of five different ways of owning and disposing of clothing; including renting, resale, and recycling. 

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The study found that “renting clothes had the highest climate impact of all. The hidden environmental cost was found to be delivery and packaging costs. Renting involves a large amount of transportation, taking the clothes back and forth between the warehouse and the renter. Dry cleaning is also harmful to the environment.”

Renting clothing was thought to be one of the more sustainable ways to lessen your impact on the fashion industry’s major sustainability issue. According to GlobalData, the rental clothing industry is expected to be valued at $2.3 billion by 2029. A report from the World Economic Forum suggested that the industry has already generated 5% of global emissions. 

Dana Thomas, author of ‘Fashionopolis: The Price of Fast Fashion and the Future of Clothes’, wrote that instead of relying on rental clothing to solve fashion’s environmental crisis, the concept should just be completely recategorized. 

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“We should think of renting like second-hand shopping. It’s not something we do all the time, instead of buying our clothes and swapping out outfits nonstop, but on occasion, when the need arises, like proms or weddings.”

“Many rental brands misuse the term circular economy – the system where clothes are passed from person to person before being recycled – as a form of greenwashing. No executive wants to overhaul their business, and that’s what ‘going green’ will require, not tweaks but an entire overhaul. They are too focused on short-term gains to invest in long-term benefits,” Thomas explained. 

“Only regulation will solve that problem. No company, in any industry, will volunteer to take a loss for the sake of the planet. They’ll do so when it’s the law. The biggest obstacle is greed.”

The study concluded that if rental companies change their logistics to make the process in which they rent out clothes more environmentally friendly, then renting would be at the same level as reselling. 

RV

Things You Should Know Before Renting An RV

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Fantasizing about going on vacation during a worldwide pandemic is either the last thing on your mind, or the only thing keeping you sane during this entire quarantine. However, it can still be fun to disengage from our current reality and think about what life will be like once all of this over, even if it’s just for a little while. 

Taking a trip in an RV has risen in popularity exponentially within the past decade, and now that we’re in the middle of a pandemic that requires you and your loved ones to distance yourself from the rest of the world, an RV road trip is actually one of the most realistic vacations you can go on in the middle of a pandemic; assuming you’ll be keeping to yourselves wherever you end up camping out. So if you’ve never owned an RV but are debating investing just to get out of this reality for a little, here are a few things you should know: 

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The biggest obstacle most people think about when it comes to getting an RV is the investment itself. But if you’re simply renting the vehicle, it’s really not as expensive as you would think. The cost of rental is dependent on how long you’re planning on using the RV for, where you’re going, the type of vehicle, and other extra costs like insurance and camping supplies. On average an RV rental can run about $150 a night, or around $1,000 for every five days. 

The other major cost is paying to park your RV, if you have a friend’s property or access to a free overnight parking lot depending on where you’re going, that’s obviously going to be your best bet. If you don’t have access to either of these options, RV overnight parking normally costs around $30-$50 a night depending on the area. 

“Pack thoughtfully, RV renters should speak to the RV owner about what they keep on board for their renters, such as linens and cookware. It’s important to have a tool kit and first-aid kit on hand, in case of emergencies. If you’re traveling with kids, don’t forget games, craft supplies, movies, kitchen supplies, and of course, sticks, graham crackers, marshmallows, and chocolate for making s’mores,” says Megan Buemi, senior manager of content marketing at RVshare

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When planning your trip, get the whole family involved in what you guys are looking to do. Plan out your route beforehand so that you’re prepared for how long your journey will be and where the most ideal places to stop, for either sleeping or bathroom breaks, will be.If you’re going to be staying at a lot for RV’s specifically, make sure to call ahead of time to reserve a spot if needed. 

If you’re making the decision to go on an RV road trip, you also need to consider things like if you’re going to be the one driving, where you’re going to pick it up, if you’re just going to tow it behind your regular car for the whole journey, etc. There’s a lot of specific factors that really have more to do with how you personally feel. 

Don’t drive an RV for the sake of adventure if you’re not actually confident in your ability to do so. Like any vehicle, once you get behind the wheel you’re responsible for the safety of everyone inside the RV as well as everyone else on the road. So be mindful, do your research, and talk to some experts before making any major decisions.

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Airbnb CEO, Brian Chesky, Pledges More Than $250 Million To Coronavirus Relief Efforts

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The major corporation was recently put under fire after refusing to help compensate Airbnb hosts who experienced a multitude of cancellations in order to prevent the spread of covid-19.

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What Does Being An Airbnb Host Really Entail?

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Airbnb is one of the biggest unicorn companies taking over the world right now. Unicorn companies are any business that can be valued at over $1 billion, and it didn’t take long for Airbnb to reach that status. Now, there’s a whole slew of online property rental services that allow property owners to temporarily rent out their homes to individuals looking for a little getaway. However, Airbnb still remains the most lucrative out of all of them. 

Being an Airbnb host may not have ever seemed like a feasible idea to you before, but when you consider the benefits, it almost seems like too good of an opportunity to pass up on. Granted, you will need to ensure you have another place of residence to stay at while your property is being rented out, however, what you earn from Airbnb itself might be convincing enough to do so. 

Obviously every space is different, and will be valued according to specific qualities such as location, room numbers, amenities, and historical trends that local competition has priced itself at. Most first time Airbnb hosts use the startup Eliot & Me or any other rental pricing calculator to determine how much they should be charging per night to renters. 

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If you have access to any local real estate agents, don’t hesitate to ask them to appraise your property for rental pricing as well. Individuals in the real estate industry will know better than anyone what your home should be valued at, even for short-term renting. Airbnb customers can make anywhere between $2,000 – $10,000 after renting their properties out just once, depending on the duration of stay and cost per night.  

Airbnb prides itself on professionalism and keeping the renter/client relationship cordial. Individuals who rent out their homes are automatically paid exactly 24 hours after a guests check-in time. This is meant to ensure that neither party is scammed or has any major issues before a concrete money exchange is made. 

Many individuals who are privileged enough to rent out one of their properties multiple times in a given year can rely on Airbnb hosting as their primary source of income. However, it’s important to note that while this sounds like it may be an “easy” career path, as a host you need to understand that this is still a job, and you’re expected to run your “business” as a host efficiently, just like any other job. 

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So what are some of the responsibilities that come with being a host? First and foremost, you should respond rather promptly when an individual states their interest in renting out your property. Answer any questions clearly and concisely, remember, how you interact with each person who rents your property will be reflected in their online reviews afterwards, which future clients will see. 

When you actually lock in a rental for the future and it comes time for your new guests to arrive, make sure your property is clean and everything is set up as expected before their arrival. Any accommodations that you listed on your profile should be pre-prepared for use. Accuracy is the key when it comes to hosting, so make sure every room matches its picture and your personal belongings are out of sight. 

The pictures on your profile are arguably the most important part of your listing, as well as your ability to host. Obviously these photos will play a major role in your potential guests decision making process, so make sure they really showcase the essence of your property. You don’t have to live in a huge mansion to properly show off the pieces of your property that anyone would enjoy on a temporary stay. 

Honesty, professionalism, and promptness will get you far in any industry, and when it comes to renting out your own house, these factors couldn’t be more relevant. If you’re still unsure if being an Airbnb host is right for you, do some research, ask around and find people who have rented out properties for short-periods of time before. Even if it wasn’t through Airbnb, they’ll still have amazing insight into what it’s actually like to leave your home for a little while for financial gain. Talk to real estate agents and search up some chat forums on the topic, before you know it, you’ll be ready to host your first guests!

Real Estate Investing

How To Start Investing In Real Estate

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Investing in real estate can be one of the most lucrative ways to spend your money, however, like most things in life it takes time to actually get good at it. If you’re a novice in the world of real estate investment but are interested in building your portfolio and ability to strategize ways of making a profit, then these basic tips will steer you in the right direction before taking the leap. 

You have to get organized, first of all. Figure out what type of investing you want to get into and hire an agent who can guide you in the right direction in terms of your investment. Unless you’re already a well-equipped expert in all things real estate, you should definitely have someone who’s actually working in the field in your corner. The last thing you want is to invest in a property only to lose everything and owe money; having an expert with you will steer you away from that. 

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Once you have an expert in your corner, create some sort of spreadsheet-like visual that can help aid your decision making process in terms of what to invest in. This is where you’re going to want to write out your general budget, the potential deals that you have in queue, current market values/stats for the upcoming months (your expert can help with these more specific ones), mortgage/rental/utility monthly costs, and any other detail you want to keep in mind before pulling the trigger on an actual investment. 

Use your visual aid to compare and contrast what areas certain properties thrive in, and are weak in. The visual element is crucial and worth repeating because if you literally see multiple red flags appearing with a certain investment opportunity as you’re writing it out, it’ll be easier to toss that one aside to make your decision much clearer.

It’s also important to remove any emotional attachment you may have with a potential property. Remember, you’re investing in the numbers of a rental property for profit, which is your end goal. It can be easy to take on a property, get passionate about whatever work needs to go into it, flipping it to fit your personal aesthetics, and thus overspending in order to satisfy your own desires. 

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This is another example of how a visual aid can assist you in remaining objective and focused on the end goals. Once you have your investment property set up and ready to put money into, list out everything that needs to be accomplished, and the predicted costs of those necessary changes. After the needs, make a separate list of a few wants that you’d like to see done to the property personally. After you do all of the proper calculations with your expert partner, if there’s room for a few of those “wants” to be checked off the list, look at how much money you’ve already spent and THEN determine if further work would be worth it or not. 

If you can, buy local. This isn’t a necessity but it can definitely make your investing process a lot easier if you’re physically close to the property itself. Then, once the property is purchased, assuming you have a life outside of this investment, consider hiring a property manager. The property manager can be the same “expert” that’s been mentioned throughout this article.

A property manager will dedicate the time, skills, and temperament it takes to run a property that another individual has invested in. They also can help you with more difficult processes that investors face, such as needing to evict certain renters if they’re late on payments. A property manager is trained and it’s their literal job to know all the ins and outs of running an investment property. 

Regardless of when and how you decide to make your investment, just make sure you’re taking the time to do it right. Do your research, do it again, and once more. Hire professionals who are experienced, knowledgeable, and want to see you succeed in your investment, and get to it!

Rent Apartment

Why “Lifestyle Renting” is the Latest Trend in The Property Market

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In a country where owning your own home has always been seen as something of a status symbol it is a change to the norm that many residents are now preferring the option to “lifestyle rent” rather than invest in their own bricks and mortar.

The recent trend of renting as a choice has grown throughout the 2010s and it seems that it is destined to continue to grow throughout the 2020s, with many Americans choosing to rent closer to their work, saving themselves quality time that they would otherwise be spending commuting from their affordable house further out of town.

Research analyst for RENTCafe Michaela Buzec believes that lifestyle renting “offers flexibility and freedom to move around and change neighborhoods or cities. It’s also a matter of affordability, since home prices in big, desirable cities increased significantly. This trend is scattered throughout the country, but it’s most evident in the expensive markets.”

America currently has a housing affordability issue with house prices increasing quicker than income in the majority of the US market so there are also those who could not afford to purchase their own home even if they chose to.

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But it is not just those that are fresh out of college that are opting for renting. Many empty nesters are downsizing and heading to areas that they may not necessarily have been able to afford. There is also the understanding that if you move to an area that you do not like, it is far easier to move from rented accommodation than having to sell your home. It is also a fantastic way to get around some of the high house prices that have appeared over the last decade.

Research also shows that many families are getting swallowed up by debt once they own their own home, with mortgage repayments just the beginning of the costs that owning your own home brings. So although many rental properties have one significantly higher bill – many lease agreements cost more than the average mortgage repayment – many of the other bills such as commuting, repairs and maintenance are either reduced or removed completely. Landlords have a duty of care to provide a home for their tenants that is safe and secure and any issues you have should be taken care of as part of your rental agreement, meaning the money home owners are putting aside each month can be put towards the rent instead.

Another great savings is the amount of money renters would not have to pay in property taxes which vary between states. And although many landlords request a security deposit, this is small compared to the down payment that is required when purchasing your own home, with many mortgage providers requesting around 20% of the property’s price.

Renting in the 2010s saw a huge increase in the percentage of renters with 74 percent more renters in 2019 than there were in the 1960s. Currently over 100 million Americans are living in rental properties thanks to the number of renters increasing far quicker than those purchasing their own homes.

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And it is not just financially that renting can benefit you but it can help you in a health capacity too. By moving closer to work it is more convenient to walk, or even cycle, not just to work but also to any entertainment or retail locations you may want to visit. This also reduces the costs of the wear and tear on your vehicle as well as the money you would have spent on gas and parking.

A recent study of why people chose to rent in the last ten years saw that the reasons were varied, with some stating their financial requirements – such as high student loans as well as the increase in the housing market prices. However others felt the need to rent due to the ever-changing job market with long-term job security no longer an option for many American workers.

Although in the past it was easier to have job security, many employees find they have to move regularly for work meaning owning their property is not always the best option. This is clearly evident in cities where there used to be a homeowner majority such as Memphis, Tennessee; Detroit, Michigan or Stockton in California, who have all seen their renter majority increase over the past decade although Springfield in Missouri is one of the top ten cheapest cities to rent.

As Buzec confirms:

“Perhaps the most surprising aspect is to see cohorts traditionally oriented towards homeownership give up this status and willingly start renting. These include seniors and high-earning Americans, who see renting as the better option for their situations. This fact supports the most prominent trend of the decade, that of renting as a choice, more than simply a solution.”

NYC Real Estate

How NYC’s Real Estate Market Continues To Change

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As one decade ends and another begins, the New York City real estate industry is taking all it’s learned within the past ten years and applying it to 2020. Throughout the past decade, there’s truly been a shift and growth within the cities real estate market. Brooklyn has become a hub for millennials and young families, Manhattan has gotten pricier as always, and Harlem is going brownstone. The east coast concrete jungle is forever changing with the times and as 2020 approaches, agencies are preparing to keep up with that change. 

One of the major changes that’s taken over the city within the past decade is how many more condos have been built. Unfortunately, this trend isn’t exactly succeeding, as according to Bisnow Magazine, Manhattan currently has more than 9,000 condominium sale units still empty. Real estate agencies are blaming the constant influx in real estate prices in Manhattan; no one can afford the borough. 

“Everyone has seen the reports of unsold apartments, about 30% of the apartments sold have come on as shadow rental inventory. I do think we will see some repricing in the condo space,” Michael Givner, A Morgan Stanley Executive Director, said.

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Givner went on to discuss how condo repricing has already begun, and ever since Labor Day the industry has seen an increase in buyers as a response to a decrease in asking price and inclusion of more incentives. Prices in the city are becoming more negotiable through corporate sponsorship; however, the results haven’t been as successful as expected. 

Many of the residential buildings in the city are built around the same time, that’s how overall neighborhoods change in an instant. So while the demand may be there, the supply can tend to overcompensate. In addition, agents are noticing an increase in office space rentals over residential renting in areas of Downtown and Midtown. While the leasing market may be thriving through this process, the fact that more residential families aren’t moving into these spaces that were constructed for their market specifically hurts the industry in the long run. 

When certain areas of the city begin to be known as areas of business, or office spaces, that branding serves a long term impact, and it becomes way less likely that the intended market for that area will actually fill the space. That’s what agents are seeing happen in the Mid/Downtown areas. 

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“One of the millennials in my office said that Midtown is where fun goes to die. 2020 will be an interesting year to observe how Midtown rebrands itself. How long will it take, who will it attract and how will it evolve over the next 10 years,” said Colliers International NY Tri-State President Michael Cohen.

It’s also been reported that the hotel market in New York City has remained fairly stagnant for the past few years. While “stagnant” may not mean “declining,” that doesn’t mean it’s a good thing either.  A flat real estate market means not enough profit is coming in either and when it comes to the city’s hotel industry that’s what’s seeming to happen. Because of overall rising room costs, in combination with an oversaturation of hotels in the city and increase in popularity in services such as Airbnb, the industry just isn’t thriving as it used to. 

“The important thing that we found, in hospitality, is managing expenses and keeping a lean staff providing what guests want when they come to New York City. The hotels we are building have a great room, a clean bathroom, not a lot of amenity space and not a lot of staff, and what we found is that’s a recipe for success.” said Hidrock Properties CEO Abie Hidary.

While aspects of New York City’s real estate market haven’t exactly kept up with all the development it’s seen, agencies are learning from the mistakes of the past decade. As stated above, the hospitality industry is mainly focusing on what’s working and delivering that to its clients. That’s the general consensus over how to handle any and all of the problems in the industry, especially in the city.