Why People Are Renting Versus Buying Today

As professional Alabama rental managers, we are in the business of managing rental properties and helping place tenants. Over the past few years, we’ve definitely noticed a rise in the number of people who are seeking rental properties in the Birmingham area, and like others, have wondered why that is. There is a multitude of reasons why people are renting today more than ever. A lot has to do with the housing crisis we recently went through. From 2007 to roughly 2011-2012, buying a home was very difficult and out of reach for millions of families. Thanks to lending fiasco after fiasco, getting approved for a mortgage was incredibly difficult for much of the population thanks to tighter lending guidelines. Because of this, people have lingering fears of getting into the mortgage game. A recent survey of consumers explored why people aren’t buying homes like they used to and found something a bit surprising: 46 percent of those surveyed – almost half – said they didn’t pursue buying a home because they were afraid they’d be turned down by the lender. And 56 percent who do not currently own a home said fears of not qualifying have kept them from applying for a loan. Thus, they continue to rent, even though almost a third of people surveyed would like to buy a home within the next two years. Most people who want to buy a home would need financing of some sort to purchase the property, so it’s notable that many haven’t begun the process. What does this mean for rentals? Without a doubt, the home rental market will continue to be strong, not just in Birmingham but elsewhere. People simply can’t or won’t take out mortgages, for a variety of reasons, and will continue to rent because they believe it is easier or safer (or both). And while people in Alabama are more confident in real estate in general, they are staying on the sidelines for now. If you own rental properties, you will more than likely enjoy the benefits of a strong rental market for the foreseeable future.