The rise of live-in landlords, explained
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As home prices and mortgage rates continue to climb, new homeowners are embracing a skill learned by many in kindergarten — sharing. More Americans are renting out rooms in their own homes to fund mortgage expenses and recoup cash, according to Bloomberg.
Homesharing… is a way for younger Americans to break into a housing market that’s experiencing a wee bit of a supply issue. According to Freddie Mac, the US is short ~3.8m housing units, which has greatly impacted prices.
In 2021:
· Home prices rose by 19%, and are expected to rise ~6% this year
· 80% of metro areas saw home prices increase 10% or more
As costs rise, the number of buyers who would consider renting out a portion of their home has jumped from 24% in 2019 to 31% in 2021.
But it differs by generation
While 67% of millennials are open to sharing their homes in exchange for cash, that number drops to 57% for Gen Z and 34% for baby boomers.
This is partly out of necessity:
· Millennials have 20% less wealth than their parents did at the same age.
· The average price of a home today is ~$328k, compared to the ~$216k boomers spent in 1989, adjusted for inflation.
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