What Does 65% Homeownership Rate Mean To You?

I want to do some Macro Q and A and some of our Insider's Report type Q and A today. I usually do it on Tuesdays. It's about home ownership and the rates. Homeownership rates are still about 64 to 65% and right before the crash, 10 years ago, we were at about 69% or 70%. So there's still a ton of people renting. That means you maybe you're in the investing game thinking of maybe it's a good time to buy rentals. Prices are up across the board because of the low inventory, but there's still a ton of people renting.

Bubbles here and there

It's a very interesting time because you see a lot of conflicting reports about millennials wanting to rent or buy and they want to rent more than they want to buy. We're starting to see a lot of statistics that millennials do want to buy. They want to have their own home actually can, contrary to what we've been hearing. But a lot of it is because people couldn't afford to buy homes. Millennials were coming into the workforce, right as the recession was, everything was crashing and they couldn't save up to get homes. They couldn't start their lives, really took them five more years than the average, 20 something, early 30 something. We are in a very interesting time. Inventory is really low right now. We have a lot of geopolitical things going on. Trade wars, currency wars, asset bubbles left and right, bond bubbles, credit bubble, student loan bubbles. A lot of the things, interest rates going up, taking up here and there.

Renting is still the trend

So there's a lot of things that are affecting people's ability to buy or their sentiment of towards buying. So that's why we still don't have levels creeping up that much right now. I's something to watch or something to be careful about. Something we talk about in our Insiders videos a ton obviously. I always want to bring things. It was a report I got from one of our team members monthly. I get a report every month about certain things and one of those things is home ownership rate. That's something I'm always watching to see how that is affected every single month. And like I said, it's just something that has not risen to where we are at 10 years ago. Not even close. That's millions of people that are still renting and they don't want to be, some of them might, but most of them don't want to be. They want to have a home and they just can't afford it.

Then the crazy part is it's a vicious cycle, right? Because when you have rent prices going up constantly, it's even harder to save, to go buy a home. We've had a wage growth has been slow. Rental prices have been going out to the, people can't save enough to go buy a home. So those are a lot of the headwinds were facing and that we touched on here in this video that it's very interesting, and I wouldn't say worrisome, but things that we need to keep an eye on and pay attention to. And as a home seller, it's, it's something to be aware of and know that they're, the buyers are, are struggling. There's a lot of people that are struggling out there to find something that's affordable and it helps when you're in negotiations to know the other side of the story.

Create win-win situations

If you have areal estate agent, I would always be asking my agent, "What's their story? What's going on? What is the negotiation? How can both sides feel that they've won in order to get something out of it and make a deal happen? What are they looking for, what's their why?" And then once you know that "why," then you can negotiate and then you can actually create a win-win situation. So it's probably one of the biggest tips. I didn't even want to go into negotiation topic here necessarily, but one of the biggest negotiation tips I can give anybody is that you have to know the story and why people are doing what they're doing. And then you can focus in on that and get people. It's amazing when you focus in on that a lot of times it doesn't even have to do it with price. Sometimes it has to do with other factors at play, maybe time or terms or things like that. So know what someone's looking for and then you can create win-win situations. Always ask your real estate agent or your advisor what is it the other person's looking for? What is it other side is looking for? And that way you can help each other attain those goals. Like I said, a really quick Q and A, it's a question that we've been getting lately. When markets go up like this and the prices are up, people tend to want to jump in the market a lot. Investors want to jump in the market, they want to make flip homes, things like that. But I would, many people look at it holding property.

It's a game, play it at your best

Flipping is a gambling game. It's like going to the casino and throwing it down on black. You just don't know what's going to happen. You don't know what's going to come from that. So the buy-and-hold strategy, that's tax advantage strategy right there. That's everything. You get passive income every single month. And again, this is something we've talked about many times over the years. That's my personal favorite - getting quick cash and flipping. That's great but either way, just know that there are many headwinds right now in the market, but at the same time, for the seller, it's an unbelievable time to get equity out of your home. Right now, especially in the South East Michigan, with inventory like it was last year or two we're in those lows. So if you're looking to buy or if you're a seller looking to get out and then go buy something, it's an incredible time this next month or two before the market starts heating up again.

I appreciate you guys, your time, your energy, your attention. It's truly the most important thing we have and we look forward to seeing you later this week. Let us know any questions that you do have. Throw comments in here, that way we can answer them and help everyone learn and grow at the same time. I appreciate you guys. We will look forward to seeing you very soon.

Leave a Comment

You must be logged in to post a comment.