In 2008/2009, the American economy took a huge hit, and unsurprisingly, Americans stopped spending money. This was especially true when it came to home-buying. But now that the economy is picking up and gaining traction once again, a discouraging fact appears to be evident; less people are buying homes than before the recession. With all the financial considerations your clients must make, including acquiring the right Professional Liability Insurance for Residential Real Estate Agents, the last thing they want to worry about is the fact that people simply don’t want to buy.
This fact, however, was highlighted by a Zillow Real Estate Market report just this past July, homeowners can expect to pay just 15.3% of their income toward a mortgage payment on a typical home, while renters can expect to pay our 30% of their income. When you compare this to the fact that a typical homeowner has double the income of a renter, it makes one wonder why more people aren’t buying.
Income is not the whole story, according to banker and writer Matthew Frankel of The Motley Fool. Frankel suggests that this trend has less to do with money and affordability and more to do with lifestyle choices. Many younger Americans, millennials, are waiting longer to get married and have children, plus have significantly higher student loans to pay off than perhaps their parents or grandparents did at their age. Some may even not want to be tied down to one location for a long period of time, picking up a habit of “job-hopping” more than any generation before.
Another theory, offered by experts from Realtor.com, is that consumers may be spending more than anyone realizes, because areas like healthcare aren’t being measured when it comes to the renting vs. homebuying data being collected. Buying a home is a significantly big-ticket item for consumers.
Whatever the reason, selling residential real estate has become a difficult task. At PL Risk, we understand that risks that can arise from trying to make a hard sell, and offer comprehensive Errors and Omissions Insurance policies as a result. For more information about our products and the various industries we serve, please contact us today at (855) 403-5982.