The real estate market moves extremely quickly and can change from day to day. We are always keeping an eye on a number of data sets to understand how shifts in the market might help those looking to buy or refinance a mortgage.
When looking at the median household income and the median home price in Oakland County we are seeing some really interesting numbers as it relates to home buyers in the area. According to our data partner MBS Highway, there are about 81,000 renters in Oakland County that could afford to purchase a home.
It’s important to note that the figures only look at averages and shouldn’t be looked at as the total number of buyers that are in the market. Additionally, there are a number of other personal factors that contribute to someone’s likelihood to actually purchase a home. From various types of debt to the amount of cash-on-hand for a down payment, buyers are faced with many considerations.
One potential explanation as to why more of these renters aren’t making the move to home ownership is also a function of inventory. According to realtor.com, Oakland County is currently a seller’s market because more people are looking to buy than there are homes available. With limited inventory, buyers may be struggling to find the “right” home for them.
There is also a generational trend at play here. Millennials are renting at much higher rates than previous generations. The reason isn’t necessarily because they can’t afford to buy, but because the costs of homeownership just don’t seem worth it to this group. This of course doesn’t apply to all Millennials, but the trend is directionally accurate.
The delay of major life events like marriage, having children, etc., are also said to be contributing to these extremely high rates of renting. Overall, Millennials who own homes are far less than the number of Gen X or Baby Boomers who owned at the same age.
The Takeaway for Renters
If you are currently renting, home ownership may actually be more within reach than you might think. Mortgage rates are still on the low side compared to the last 3 years and it’s a good time to buy, should you find a home that you like. At the very least, renters should be speaking with a mortgage partner to understand what kind of financing rates and loan options are available.