Did you participate in any "Psychology 101" experiments in college? In the name of science you're asked to complete a task. Meanwhile, the researchers track other aspects of your behavior and try to establish greater understanding about human nature. Most experiments are designed so you aren't even aware of what the researchers are really
The same is happening right now, in this housing market. While analysts are measuring housing stats they're also watching something else: more homeowners becoming renters. It's not an experiment per se, but, it does have a psychological component. It starts with the overall blues regarding the market's burst bubble. But, the blues might also provide a peek into changing attitudes about the value of renting over home ownership
What does this mean for the average renter? Potential bargains - for the moment.
The Wall Street Journal took notice
and suggests that there are several reasons for the "more renters" trend. Here are a few: first, the flexibility of renting
while seeking employment. Second, many of the renters who moved in with roommates en masse during the recession are (understandably
) ready to move out. Third, the end of the home buying tax credit
could make renting look like the better option.
Climbing demand in some markets
could mean that it is in your best interest to lock in a longer lease
at favorable cost. So lock in your relatively "low cost" lease now. Overall cost of renting is down 5% nationwide compared to the 2008 peak
If you're set on eventually becoming a homeowner you can rent while you to "wait out" the turbulence in the single-family market. You may miss out on historically low mortgage rates and lower home prices, but, on the other hand you can try a rental home
over an apartment and figure out if you'd really like to maintain a yard (and other chores associated with a home).
Lastly, the abundance of housing market pessimists gives plenty of opportunity for a bit of "reverse psychology"
when negotiating your next lease.
One bright note? The uptick in rental rates might signal that demand hit bottom in housing two quarters earlier
than expected. Despite the lingering blues about the housing market, that's good news for the economy.