In a previous article – which you can read here – we discussed how there are many misconceptions when it comes to home buying and lending that make many millennials hesitant to go through with the process.
“Many” equates to about 42% of millennials, or 30,000,000(!), that have yet to buy a home. That’s a huge portion of the US population that has yet to tap into the real estate market.
So how do we in the industry better get through to them? One of the ways is addressing the concerns they may have directly – whether or not they have any factual backing.
For example, look no further than the renting vs. owning debate. For years, the consensus opinion has been that renting is cheaper than owning. A recent report found that 84% of renters believe renting is cheaper than owning – a record high for the study by Freddie Mac. That’s up 17 percentage points from the same survey in 2018.
The perception is actually intensifying.
But when looking deeper into the numbers, it’s not entirely true. Sure, there are a handful of markets in the US where renting works out to be cheaper, but overall, owning is more cost effective – especially for about 9 out of every 10 counties in Ohio.
Freddie Mac dug even further and found that 42% of renters paid more than a third of their household income on rent, while only 24% of homeowners spent that much on mortgage payments. They added that 70% of renters are concerned that their rent will increase in the next year, and about 40% of them are planning to purchase a home in the near future.
So what does that all mean for Realtors®?
It means that there is a large portion of the US that is either A) misinformed about the true cost comparison between renting and owning or B) concerned about the rising rent costs and are ready to start looking for a home.
Knowing how to communicate the real data and strategy to buyers will be key to tapping into that group. Not even just about the dollars and cents, but also the long term benefits of homeownership, such as home equity, tax deductions, fixed payments, etc.
Giving them the information as opposed to them making their own assumptions will lead to a larger pool of prospective buyers, and more confident buyers as well.
If you have prospects that believe it’s cheaper for them to continue renting, have them try this calculator tool that allows them to see what their current rent payment equates to as a mortgage payment: TRY IT HERE
Above all else, being patient and prepared to combat misconceptions like these in the industry will give you a distinct advantage and can help grow your career.
Record number of renters believe renting is more affordable than owning. (2020, February 14). Retrieved from https://www.housingwire. com/articles/record-number-of-renters-believe-renting-is-more-affordable-than-owning