Did You Rent Before Buying Your First Home?
For a lot of people, renting an apartment or house before buying their first home serves as a type of practice run. In fact, before 2003, about 80 percent of first-time home buyers rented prior to becoming homeowners. Typically younger, first-time buyers can get a taste of autonomy and responsibility as a renter before taking on the added challenges of home ownership. These days, however, an increasing number of first timers are skipping that step and buying their first house after living with a parent, relative, or friend. That seems unusual, but is probably explained by the fact that it's easier to save for a down payment when living rent free. And – since a growing number of young Americans name saving for a down payment among the top obstacles preventing them from buying a house – this makes sense. But what about repeat buyers? Well, according to data from the National Association of Realtors' Profile of Home Buyers and Sellers nearly 30 percent of repeat buyers last year were renting prior to purchasing their home. That's a dramatic change from years past when it's been as low as 10 percent. According to a report from Jessica Lautz, NAR's managing director of survey research and communication, recent economic history helps explain the upswing. “The increase in renting may have occurred as sellers waited during housing market uncertainty to purchase another home and tight inventory drew out that process until they were able to find the ideal home to purchase,” Lautz writes. Tight inventory would certainly be a major contributing cause here in the Bozeman area. It's no secret that we are experiencing a housing shortage, particularly in the price range most first time home buyers are shopping. There are 20% fewer new listings under the $250,000 price point than were on the market last year.* Are you being forced to rent due to tight inventory?
*Gallatin Association of REALTORS