“Buying a home is more advantageous today than ever before,” encouraged my next door neighbor who was also a real estate agent. My first thought was yeah right! With the market in such a depressed state you are just desperate to make a sale. That was 1982. He was both right and wrong. He was right because the little 3 bedroom, 1 bath house I bought in 1982 for 0,000 is now worth 0,000 even at today’s recession prices. That is an incredible increase of 350%. But he was also wrong. Are you wondering why? He was wrong because this current economic crisis has created an environment that may never be duplicated in another 100 years. Here is what I mean. Have you been watching the news? Are you reading today’s headlines? Our government is injecting trillions into what will hopefully end the recession and result in a national recovery. The economic stimulus bill is designed to guard against depression. Many Americans are asking this question. Where is the money for economic recovery coming from? Money for the stimulus package comes from you and me in different ways. The federal government has to borrow the money from its citizens by selling debt in the form of US Treasuries and Bonds. In addition local and state governments raise taxes and charge higher fees. But when the government borrows money by going into debt, inflation is triggered. When state and local governments increase fees such as sales tax, or gas tax, the cost of living rises. Inflation means that the cost of items we enjoy, use and need every day will become more expensive. Rents which are susceptible to inflation will not get more affordable. So how do we protect ourselves from what is inevitable? One way is by buying a home and locking in monthly house payments at current mortgage interest rates. Right now renting may seem cheaper than buying a home but over time rents are going to increase partly because of demand and partly because the dollar is going to be worth less. We are already seeing an increase in rental demand due to mortgage foreclosures. The decrease in the value of the dollar will come later. Here in lies a big mistake that many people are going to make. Thinking short term. Renting versus buying a home seems like a better deal right now. But if you want to protect yourself and your family from the effects of inflation, you want to start thinking long term instead. This is the point. Even if the rate of inflation remains fairly tame, rents are still going to rise. In addition current mortgage interest rates are not going to remain at historical lows forever. The Federal Reserve will have to manipulate interest rates higher in order to starve the coming inflation. Because the price of buying a home has hit near bottom, real estate prices too will rise. In another 5 years, the value of houses will have increased and the low daily mortgage rates we enjoy today will follow. Do you want to make sure your family is protected from the coming inflation? Even better, don’t you want to take advantage of it? The best way is by buying a home. Here is my prediction. There will never be a better opportunity during your lifetime for buying a home than right now.

Many renters in some areas are quickly discovering they are not immune to housing problems after all. One of the most common problems is the fact that while renters do not have a mortgage on their property, their landlords do have a mortgage. If the landlord is not able to make their monthly mortgage payments due to rising interest rates and adjustable rate mortgages, the rental property could very well go into foreclosure.

When that happens, renters could find themselves facing eviction. In some cases, renters have discovered they had only 30 days to leave properties they had rented for quite some time. This has placed a tremendous amount of stress of many renters as they struggle to suddenly not only locate a new place to rent but also to come up with the cash necessary to make rental deposits.

In other cases renters have been affected by rapidly rising rental prices. Nationally, rental prices have begun to rise. Currently, the worse places to rent because of rising rental prices are San Francisco and New York. Seattle, San Jose and Cleveland are also showing signs of rising rental rates. San Bernardino and San Diego are not far behind, either.

One of the reasons that rents are rising in these locations is the fact that developers have not been able to construct as many new apartment buildings. In highly populous areas this has resulted in a large demand with little supply. When supply is not able to keep up with the demand, the natural result is rising prices. To make matters worse, rapidly increasing numbers of former homeowners are either selling their homes as a result of the housing crash or being forced out of their homes due to foreclosures. They must have someplace to go and renting is often the only viable option for these individuals and families, further increasing the demand for rentals.

Overall, the national vacancy rate for rentals has declined more than 10% in the last four years, clearly indicating that more people are renting properties today than they were right before the housing boom of 2005. Nationally, rents have also risen 14% over the same time period, as reported by the Census Bureau.

A number of factors have contributed to the rising rate of rental prices. One of the most important factors that have contributed to rising rental rates is the fact that more and more renters are waiting for the prices of homes to drop before they make the decision to purchase. Many renters are assuming that home prices have not yet hit the bottom. For these renters, it just simply does not make sense to buy right now. Quite simply, most renters do not want to find themselves in the same financial troubles that many homeowners have been subjected to in the last two years.

There is also the fact that even buyers who would be willing to buy right now are simply not able to do so because of difficulty in qualify for affordable mortgages. Following the collapse of the subprime market, many lenders have tightened restrictions and now requesting not only good credit but excellent credit. Requirements for larger down payments have also increased, making it increasingly difficult for first-time home buyers to realize their dreams of home ownership.

The health of the rental market is being eyed with some concern due to the fact that the rental market actually has a strong impact on other sectors. The construction of apartment buildings, for example, is frequently affected by the health of the rental market.

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Today that is no longer the case; however. While rents have continued to rise in many locations, consumers are still finding they are often able to rent for less money than what they would pay for a monthly mortgage payment on a comparable property. In some cases, renters are able to save between 40% and 50% by renting instead of buying.

One of the reasons for this is that in some locations, property values rose quite steeply. Today, buyers who snatched up those homes without blinking have discovered they must now sell. The problem? They need to sell the homes at the prices at which they purchased them two years ago to recoup the balance they owe on the mortgage. Renters just are not willing to pay more money than a home is worth.

Even renters who are able to qualify for mortgages just do not feel as though they are getting enough home for their money, especially when they can often rent a comparable or even larger home for less money.

As a result of the shifting market, many experts are quick to point out that today the market is no longer a seller?s market and it is not really a buyer?s market either. Instead, it has become more of a renter?s market.

Other renters are holding off on the idea of buying because they are concerned that prices have not yet hit the lowest point. They are primarily concerned that if they purchase a home today it may not be worth the same amount just six months from now. They feel it is far more prudent to wait and see exactly where the housing market will land before they consider buying a home. Other renters are concerned about the upcoming hurricane season. Few have forgotten the hurricane season of just two years ago that devastated many areas. Homeowners in those areas, especially those without insurance, have yet to recover.

While some areas are experiencing a deficit in supply of rental properties, in other areas homeowners have recognized the wisdom of holding off on selling their homes. They, too, are reluctant to sell their homes now when it seems more prudent to wait and see when the market will stabilize. To help make ends meet, many of these homeowners are willing to rent out their homes to the scores of renters lining up to take advantage of the opportunity. Even homes that are on the market for sale are also available for rent. While renters must accept the reality that the home in which they are living must be available for showings, they still feel the trade-off is quite worth it.

Would-be investors who attempted to get in on the quick profit potential of flipping homes have also discovered that it makes more sense to rent out their properties right now instead of trying to selling them. In some cases, investors are discovering they simply do not have any other options when they must meet mortgage payments every month and are unable to sell their properties. In some cases, this means renting the properties at a loss, creating a negative cash flow.

In fact, this situation has become so much of a problem that landlords in certain niche markets are finding they must cut rents in order to create even a small amount of cash flow. These investors have quickly discovered that it is far better to rent right away at a loss than wait several months to try and attain the amount of rent they really need. Although landlords are often upside down on most of these properties, renting them out has proven to be the safest method; at least for now.

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