One of the collateral effects of covid-19 on the American housing market appears to be a rise in the potential for buy-to-let in the US. A recent survey reveals that almost 45% of renters have delayed their decision to buy a property. Furthermore, 23% claim they will never purchase their own home.
The survey, published by Rentcafe in mid-July, asked renters about their homebuying intentions before and after lockdown. In January this year, 11% of those who answered the survey said that they were ready to buy in 2020.
This percentage is higher among Generation X (those born between 1965 and 1980) where 15% had plans to buy this year. 14% of older Millennials also said they intended to leave tenanted accommodation to move into their own home in 2020.
Among those who planned to stay in rental accommodation, 25% intended to upgrade their apartment.
Shift in tendencies
By the end of May, these plans had abruptly changed. Some 43% of survey respondents said their plans to buy were now on hold. They cited economic uncertainty as their main reason for delaying their homeownership with loss of income in second place. The percentage rises even higher among older Millennials where 50% now have no intention to buy this year.
Rising house prices across the US are another deterrent to would-be homeowners. Property values have continued to go up despite lockdown, fuelled by strong buyer interest and shortage of supply. The market looks set for its busiest summer on record.
Future date for buying
However, despite huge interest in property on the market, many renters have parked their plans to buy at least for the medium term. 56% of respondents in the Rentcafe survey said they now intended to buy in the next five years. Nearly a quarter (23%) claim that they will never purchase.
This panorama offers strong potential for buy-to-let in the US. The reluctance of tenants to buy post-lockdown means that demand will continue for rental properties over the short and medium term.
“Considering the current market conditions, renting appears to remain the lifestyle of choice for many,” claims the Rentcafe survey. This is particularly true among certain demographics such as the over 60s, the so-called Babyboomers. “Boomers seem to be getting more and more comfortable with renting,” says Rentcafe.
Renting more viable than buying
Regardless of the current covid-19 situation, the US property market currently presents several challenges for would-be homeowners. High prices and low supply take homeownership out of reach for many.
According to Doug Ressler, Manager of Business Intelligence at Yardi Matrix, the decision to buy a home now depends on financial considerations and targeted area of purchase. He says that “in more than half (59%) of housing markets nationwide, renting a 3-bedroom property is now more affordable than buying a median-priced home”.
Choose the right buy-to-let in the US
The current market undoubtedly offers excellent potential for buy-to-let property investment. However, success will depend, as always, on choosing the right property in the right location.
BRIC Group has a selection of buy-to-let in the US in key metro areas of Florida with sustained demand from the local market. Many of the properties come with a 2-year rental guarantee and already have qualified tenants. Investment starts at just US$102,000. Find out more about Florida turnkey properties.