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Homeownership

The split realities of renters vs. homeowners

(HOMEOWNERSHIP) The housing market is telling a tale of two countries: Between renters and homeowners, wealth inequality has split the country in two.

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The pandemic has generated a tidal wave of house hunters attempting to relocate; previously ignored markets all across the country, particularly in suburban areas, are awash with new clients eagerly seeking an escape from expensive and densely populated cities. Record low mortgage interest rates in the US have only bolstered this migration scramble. The ultra-wealthy are even opting to leave the US entirely, fleeing to regions with fewer cases, such as New Zealand.

Renters, on the other hand, generally don’t have the luxury of being able to afford a house. Most are currently trapped between a rock and a hard place (proverbially speaking).

The extra unemployment assistance granted by the CARES Act, which was helping countless Americans pay rent, expired two weeks ago alongside the federal eviction moratorium. State and local moratoriums on evictions are also withering away. Young adults have holed up with their parents where they can (myself included). Meanwhile, the Senate continues to deliberate on the details of the HEROES Act, which – hopefully – will extend the $600 weekly unemployment bonus, and provide more stimulus checks to people in need.

As renters face destitution, landlords have in turn seen their incomes dry up. Twitter is rich with specific examples of threats and harassment received by tenants from their landlords for failure to pay rent, despite the unemployment crisis, and the cutthroat job competition it’s created. In all fairness, though, small landlords are themselves facing similar heat from their banks. One survey of landlords in Massachusetts, performed by MassLandlords, showed that one-fifth did not know how they would make ends meet this year – clearly a ripple effect from this preventable rental crisis.

The role of demographics here is important to note, as is often the case when housing is concerned. Of course, Millennials have been mostly relegated to renting for a long time. It’s been a meme among my generation for the better part of a decade that very few Millennials will ever end up buying homes, and Gen Z is on a fast track to join us. Not to mention that the historical impact of redlining, which extends several decades, has yet to be reconciled. It can still be seen in the national rates of homeownership which are disproportionately low among non-white, and particularly Black, Americans.

If youth, people of color, and impoverished renters are about to face mass nationwide evictions, the HEROES Act is their best shot at a miracle. But if it fails… then, I guess, Congress will ask that they eat cake.

Desmond Meagley is an award-winning writer, graphic artist and cultural commentator in D.C. A proud YR Media alumn, Desmond's writing and illustrations have been featured in the SF Chronicle, HuffPost, Teen Vogue, The Daily Cal, and NPR among others. In their spare time, Desmond enjoys vegetarian cooking and vigorous bike rides.

Homeownership

Home sales dip 10%, inventory levels continue to plague the market

(HOMEOWNERSHIP) While demand for home sales has remained high, a lack of inventory means that numbers have continued to dip, according to the NAR.

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Home interior with gray couch, cactus pillows, and succulents on the coffee table in front of the couch.

In February, all regions experienced a decrease in pending home sales (contracts penned), according to the National Association of Realtors (NAR). Compared to January, sales fell 10.6%, and fell 0.5% from February 2020.

As with every real estate news story you’ve read here in recent years, NAR continues to point to tight inventory levels as the continuing plague on the market.

“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift but contracts are not clicking due to record-low inventory,” said NAR’s Chief Economist, Dr. Lawrence Yun.

He observes that overall demand does not appear to be impacted by mortgage rates trending upwards, expected to remain low at no more than 3.5% this calendar year.

It is interesting to note, however, that more expensive homes had increased sales activity because of “reasonable supply,” per Dr. Yun, adding that homes above the $250,000 mark have driven home sales in recent months.

That said, Dr. Yun indicates that even homes priced above $500,000 to less than $1 million are subject to the tight inventory challenges.

“Potential buyers may have to enlarge their geographic search areas, given the current tight market,” Dr. Yun noted. “If there were a larger pool of inventory to select from – ideally a five- or a six-month supply – then more buyers would be able to purchase properties at an affordable price.”

In past months, NAR has repeatedly pointed to the same solution to the inventory challenge – new home builders. If supply were increased and housing starts improved, demand would be more readily satiated and fewer people would be priced out of the market.

Economic conditions typically shift under any new President, and with an ongoing pandemic, we are watching for any signs of hope in a dark time. With building material costs continuing to increase, labor conditions in the sector remaining difficult, mortgage rates are rising (albeit slowly), inventory levels are not expected to immediately improve.

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Homeownership

Why realtors shouldn’t use the term ‘Starter Home’

(HOMEOWNERSHIP) You see the term in the MLS for fixer uppers, you hear it when Realtors are working with first time buyers. But the term “starter home” shouldn’t be in anyone’s vocabulary. Here’s why.

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starter homes debt existing home sales

Just words

Collins English Dictionary defines a starter home as a “small, new house which is cheap enough for people who are buying their first home to afford.” You won’t find the phrase too often outside of the real estate industry.

There isn’t much about the etymology of the phrase, but most likely, it’s a marketing ploy to get people to buy into the idea of purchasing another home in a few years.

Grind your gears

Mark Greutman, husband to Lauren Greutman, believes that the term “starter home” should bother people. The phrase implies that you will upgrade later.

Your starter home isn’t good enough for the rest of your life. And not to get into how well Americans have it, what about people who will never be able to afford anything more? Is it an insult to them?

Do you really need two living rooms?

Older generations bought one home and lived in it until they could no longer be independent. In today’s world, we buy a starter home, then upgrade to have more space, to live farther away from our neighbors, to have rooms that are only used once or twice a year, and to make sure you have a 2 or 3 car garage to hold your vehicles and more stuff, some of which isn’t taken out very often.

But consider this: You could pay off your starter home in 15 to 20 years, if you budget right.

You could be out from under a mortgage and have money to travel, send the kids to college, or even retire early. When you think about what led to the financial crisis in 2008, isn’t it better to have a smaller house where you can make the payments than worry about losing your house?

Be content where you are

Realtors are motivated to make sure that they have customers. If people buy one home with the intent to stay, will the market dry up? Probably not, because people move and a new generation will be ready to purchase homes for their own family.

Let’s think about that phrase, “starter home.” It fuels consumerism and discontentment. Don’t call cheaper houses starter homes, but just a home.

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Homeownership

Hilarious things left behind when people move out of their house

(HOMEOWNERSHIP) People often forget what changes and additions they’ve made to a house until it is too late. This Twitter thread is a hilarious reminder to take everything with you when you leave.

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hidden in house

There are moments when social media brings people together and gives us comedy gold. Have you ever left something behind when you moved, something that while maybe not so crucially important to you, will definitely offer an interesting insight into your life? Such as a message written behind a wall, or a note hidden in an air duct? Well a twitter thread posted earlier this week opened up Pandora’s box for amusements on this topic and some of these are just getting stranger and stranger.

The original poster, @KaylaKumari, brought it up originally when she asked her mother, who had just recently moved out of her last home, if she’d uninstalled the special fire alarms that she recorded in her voice yelling, “GET OUT OF THE HOUSE BECAUSE MOM’S CANDLES CAUGHT THE HOUSE ON FIRE”. A perfect line, short and succinct. Now some poor family is going to have a fire and some woman’s voice will be ushering them out instead of an alarm. Hopefully there won’t be too much confusion there.

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My parents sold their house like a month ago but my mother JUST realized she did not uninstall the special fire alarms she had put in that are a recording of her own voice screaming at me and my sister to “GET OUT OF THE HOUSE BECAUSE MOM’S CANDLES CAUGHT THE HOUSE ON FIRE”

After that, the tweets and retweets just kept coming. Some of them mostly relating to habits or forgotten moments. In four days, the post has gotten over 17K retweets and/or comments and some of these are gems.

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A lot of people seem to enjoy feeding wildlife as well. Lots of fun shocks to go around. I would recommend however, to disclose that upon sale of the house so you don’t get sued. But this just goes to show that social media can be nice sometimes. A nice uplifting moment in our days.

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