For adults across America, the possibility of another recession is an intimidating one. While experts don’t expect the next recession to impact the housing market as dramatically as it did during the great recession of 2008, it still has the potential to affect the lives of millions of individuals.
In the first part of this series, we discussed how renting out your basement as an apartment during a possible recession can protect others during hard times. This section will look at why a recession may cause more people to seek opportunities to rent a home rather than own one. With more people choosing to rent, you will have more reason to invest in basement finishing and rent out your home’s basement.
Part Two: You’ll Have A Place To Stay For The Growing Number Of Renters
People choose to rent for a variety of reasons, from wanting the freedom to move cities with ease to not having the funds for a large down payment. If a recession does come within the next couple of years, the challenge of qualifying for a mortgage will play a large role in the number of people who rent.
Household incomes tend to be squeezed a bit more tightly during a recession. For people who are currently renting, a tighter budget could mean that they are not able to make the jump to homeownership as they had planned. They’ll have a lower price point for a potential home and that decreased price might not exist in the housing market during a recession.
Younger generations of potential homebuyers may also face the delay of their homeownership dreams during a recession. To qualify for a mortgage you need good credit, stable employment, enough money for a substantial down payment, and a favorable income-to-debt ratio. This last requirement is tough for many millennials who have considerable student loan debts from pursuing a college education. Unless these former students have a job that pays them enough to fund a down payment and offset their student loan debt, they will have to continue renting throughout the recession.
The renting demographic is also changing to include older Americans as well. Recent research shows that the number of renter households aged 60 and older increased from 6.5 million to 9.4 million between 2007 and 2017. As an increase of 43%, this outpaces the 7% increase of people in their 20s and early 30s jointing the renting demographic. This increase in older Americans renting likely comes from them not wanting to deal with the costs of maintaining a large home now empty of children and from the lower incomes that many people face after retirement.
Cater To The Renter’s Market With Professional Basement Finishing
With more people of all ages choosing to rent a home rather than buy it, now is the perfect time for you to invest in basement finishing. By performing basement renovations that transform your downstairs space into a comfortable apartment, you can meet the needs of the increasing number of renters in the United States. As basements are typically rented out at 50% to 75% of the monthly mortgage cost, you can see financial benefits from a basement remodel as well.
Contact ElkStone today to learn more about how basement remodeling can benefit your family. If you start your basement finishing project before the recession hits, you’ll be ready to provide an affordable home for the many renters in your area.