Is renting a home the new norm?

NBC's Erin Real reports that more people are deciding to rent a home rather than have a mortgage

Episode Transcript

(00:00):
I see that Red Lobster has filedfor Chapter eleven officially now after they abruptly
closed eighty seven restaurants across twenty sevenstates. They are auctioning off kitchen equipment,
so you can buy a used deepfryer from Red Lobster and smell like
deep fried cod in your kitchen.I suppose, well, they're just a
shell of their former selves. Theendless shrip is coming to an end.

(00:24):
They are, and a lot ofpeople are crabby about it. Thankfully,
though, no restaurants in Ohio atthis point are closing. Well, there
you go. We've got five orsix I believe in Columbus that are at
this point remaining open. But youmay want to run, don't walk,
or swim over to your local RedLips. Let's join Aaronreal on the Legacy

(00:47):
Retirement Group dot com phone line.Aaron with NBC News Radio. Interesting story,
Aaron about the build to rent businessis booming. What's going on here?
Yes, developers see the writing onthe wall. They say seven percent
interest rates aren't coming down anytime soonfor the thirty year six mortgage, and
as a result, they are providingthe much needed housing in the form of
rentals. So we saw ninety threethousand new single family homes completed last year.

(01:14):
It's an almost forty percent increase fromthe year before, more than any
other year ever. And this pacebreakneck, frankly, is going to continue
until twenty twenty five. Then it'sgoing to ease up a little bit.
But they're sprouting up everywhere, singlefamily rental homes. It's you know,
suburban outer rings of Texas, ofArizona, of Florida. Are you guys

(01:34):
seeing it in your general vicinity?We are seeing a ton of apartments pop
up here. Apartment buildings are justgoing crazy in central Ohio. I'm not
sure about the build to rent.I'm sure it's happening here. But you
know, my question with this too, is a lot of these If you're
doing a two or three bedroom rentalhome, the monthly rents on these or

(01:56):
anywhere from twenty five hundred to thirtyfive hundred bucks, that's a mortgage payment.
You're spot on. But yeah,and you're you're absolutely right. Nationally,
rents for both apartments and for houses, they're more up more than twenty
percent than during the pandemic years.The median American renter actually spends thirty one
percent of their income on housing.This is according to Harvard's Joint Center for
Housing Studies, and thirty one percentis deemed by the federal government to be

(02:22):
a cost burden. Yeah, thanksfor stating the obvious. But at the
same time, the average average monthlymortgage payment is now thirty eight percent of
the me like the average person's income, so it is cheaper. If you're
looking at thirty one percent versus thirtyeight percent, you're probably going to go
with the thirty one. And thenalso there's a lot of cost associated with

(02:42):
home ownership. Is something breaks,you have to fix it, there's insurance
costs which are sky high right now, every everything that you need to you
know, oil, get whatever itis your house needs. There's a lot
of costs associated with that, whererenting doesn't have it. So again,
oh and then I forgot the skyhigh sticker prises on homes and the seven
percent mortgage right So you put thatall together and you're like, hey,

(03:06):
most people just can't afford it,and b a lot of people who could
potentially afford it say I don't wantto feel that crushing weight at this juncture,
so I'm going to continue to rent, particularly those who have families and
kids. That's when you usually buya house. But they're saying, well,
if I can rent a really lovely, affordable home, perhaps I'll do that.