Architects with blueprints at construction site
Rising rent leads many to buying homes instead
Rising rent prices are pushing would-be renters to actually buy homes rather than rent apartments, condos or single-family homes in high-priced areas. And because of that, the resale and homebuilding market is benefitting significantly. This trend could be considered an inversion from what is common practice for the decision-making process in housing. Typically, renters are those who cannot obtain mortgage financing, or those who plan to move before buying a home would make long-term financial sense. But in this era of rapidly rising rents and ultra-low interest rates, a new type of buyer has been born – those who have given up trying to rent and decided to buy.
The trend of rising rents is nothing new in the greater Phoenix area. In the last three years, rents across the board have gone up significantly. 2015 saw a 9% increase in rents, which has been followed up by another 9% in 2016 and 2017 combined, according to RentCafe. RentCafe also reports that as of December 2017, the year-over-year increase in rental prices is 7%. For rental condos and single-family homes, the price increases are on par.
Tempe-based homebuilder Fulton Homes has experienced an uptick in sales this year similar to other builders and Doug Fulton attributes that gain to an influx of would-be renters. He also expects the trend to continue. “New home prices have stayed relatively flat in our East Valley Communities while interest rates have held pretty firm. That means housing payments on brand new homes have not seen the 20% increases that rents have in the last few years. And our new communities in the Maricopa have homes that start under $200,000 which come with some extremely attractive payment options for would-be renters. “
Fulton Homes is currently building new homes in multiple East Valley communities. In Maricopa, Fulton is opening up brand new communities within Glennwilde, starting next month.
For more information, call 480-753-6789 or visit www.fultonhomes.com.