The Boston Foundation reports in their annual Greater Boston Housing Report Card that while it is true that new housing is being added in the Greater Boston area, the majority of the units are in the city of Boston itself and in just a few surrounding cities while towns in the suburbs are seeing little to no construction.
Young and working families are finding it difficult to afford to live in the city but since housing prices are increasing in the suburbs because of a lack of new construction these families are left with few options. Only a handful of towns have added noteworthy amounts of housing, including Weymouth, Framingham, Plymouth, and Sharon. Out of about 13,000 building permits that were issued this year for the entire Greater Boston area, about 40% of those were issued by the city of Boston.
Although some believe that housing prices may inhibit economic growth, schools and jobs in the area continue to attract students and professionals every year. Rent prices are also slowly falling as a direct result of the additional housing that has become available.
As the millennial generation continues to head-butt its way into the housing market, credit scores are creating a sizable burden on their ability to purchase a home. A recent Rent.com survey stated that 78% of the millennial generation renters do not plan on buying a home soon.
Many cite the benefits of renting as their mainstay against home buying. However, in a recent TransUnion survey, 43% of those aged 18-34 blame subpar credit scores.
So why aren’t millennials buying houses?
Inability to obtain a fair mortgage and a general disinterest in buying. Credit score is the biggest hurdle for the younger generation, as most mortgages have a minimum requirement of credit score.
TransUnion found that one third of adults aged 18 to 34 have a credit score in between 300 and 600. A credit score of 620 will score you a mortgage, but anything lower is a crapshoot.
On average, millennials have a shorter credit history, which means there is more gravity in a missed payment as opposed to an older home buyer. Millennials do not have the cushion of a long credit history, so their mistakes are more prominent, resulting in lower scores.
Another thicket to cut through is the initial cost; the down payment. TransUnion found that nearly 60% of consumers aged 18-34 worry about obtaining a down payment. Coupled with lower credit scores, the task becomes daunting, forcing millennials to stay renting.
It will be interesting to see how the housing market adjusts to masses of millennials renting, and putting off their first home purchase.
Will home prices come down to make up for missed capital or will rents skyrocket and force millennials to reconsider?
Concessions are not typically at the top of any hopeful renter’s list of criteria. With both the quantity and quality of concessions increasing nationally, most renters critically underestimate the value and prevalence of these available benefits. Concessions may include, but are not limited to, a free month’s rent, lowered security deposits and lowered monthly payments for longer lease agreements.
You might ask, why would any landlord give away free stuff? From the standpoint of a private landlord or management company, concessions can help attract quality tenants in a highly competitive marketplace and ensure monthly rent will not be lowered. Vacancy rates nationally are at their highest levels since late 2015. As a result, landlords continue to utilize concessions to maintain a competitive advantage in the marketplace.
The fact is, more and more rental units nationally are continuing to offer concessions. According to a presentation at the most recent NMHC Research Forum, 38.6% of rental units nationally are now offering free rent for four to eight weeks, up 7% year-over-year. Furthermore, more than 10% of rental properties are currently offering upwards of eight weeks rent-free. For the renter, this means more money in their pocket at the time of signing.
How might a hopeful renter find a unit that both matches their criteria and offers a quality concession? Rental Beast’s partner agents have access to the most comprehensive concession information available via the Rental Beast database of over 4,500,000 listings nationwide. As such, utilizing the Rental Beast platform is the optimal way for any potential renter to obtain the most value possible while available rental inventory continues to increase nationally.