Harsh Reality and Costs of Renting

The Millennial generation has a decision to make as the economy improves and they begin to move out of their parents’ home and move into living space of their own. Should they rent or should they own? Before they make that decision, they should know enough to make an informed decision.

Some think that renting will be less expensive than purchasing. They should realize that Shaun Donovan, Secretary of the Housing & Urban Development Agency, recently said:

“We are in the midst of the worst rental affordability crisis that this country has known.”

At the same time, Christopher Herbert, Research Director at the Joint Center for Housing Studies at Harvard University, revealed that cost of renting is about to increase significantly:

“Well, I think it’s a basic question of supply and demand. When you have that many more renters coming into the market looking for housing, and the supply of housing isn’t responding as quickly as it might, that’s going to push rents up, even if incomes are low.”

Not every young adult is prepared to own their own home. However, those that are should realize home prices and mortgage interest rates will probably both continue to rise as we move through 2014.