California residents and others are more likely to opt for renting a home as opposed to buying one or living in an apartment. The Great Recession was largely responsible for changing American attitudes regarding homeownership. Although the housing market has largely recovered, many people no longer assume that owning a home is something that they need to do. Stagnant wages are another reason why people are opting to rent a home instead of buying one.
Younger people may be dealing with the burden of student loan or other types of debt. This may make it difficult to save up the money needed for a down payment. Millennials also are more likely to want to travel or otherwise have flexibility in regards to where they live, which may make renting a home more appealing than buying one. Individuals that are over the age of 55 also are becoming increasingly more likely to rent over buying a home.
During the housing crisis, homes that were in foreclosure or otherwise below market value at the time were purchased by investors, such as banks or other financial institutions. They were then rented out to families that had lost their homes or others who couldn’t afford or qualify for a mortgage. However, as home prices start to increase, the market is becoming increasingly controlled by landlords that own 10 or fewer units.
Buying residential property may be a worthwhile investment. However, before investing in a single-family home or similar properties, it may be a good idea to research all aspects of the purchase. A financial adviser may be able to help a person account for the financial impact buying real estate may have. An attorney may be helpful in reviewing purchase or mortgage contracts prior to the close of the transaction.