Renters Missed Out on $51,500 This Past Year

<article class="post-74747 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-74747"><span class="entry-date">November 1, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">Renters Missed Out on $51,500 This Past Year</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Renters+Missed+Out+on+%2451%2C500+This+Past+Year&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Frenters-missed-out-on-51500-this-past-year%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Renters Missed Out on $51,500 This Past Year | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/10/29154833/20211101-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/10/29154833/20211101-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/10/29154833/20211101-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>Rents have increased significantly this year. The latest <a href="https://www.apartmentlist.com/research/national-rent-data"><em>National Rent Report</em></a> from <em>Apartmentlist.com</em> shows rents are rising at a rate much higher than the three years leading up to the pandemic:<span id="more-45423"></span></p>
<blockquote>
<p><em>“Since January of this year, <strong>the national median rent has increased by a staggering 16.4 percent.</strong> To put that in context, rent growth from January to September averaged just 3.4 percent in the pre-pandemic years from 2017-2019.”</em></p>
</blockquote>
<p>Looking back, we can see rents rising isn’t new. The median rental price has <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf">increased</a> consistently over the past 33 years <em>(see graph below)</em>:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/10/29154834/20211101-MEM-Eng-1.png"><img alt="Renters Missed Out on $51,500 This Past Year | Simplifying The Market" class="aligncenter wp-image-45425" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/10/29154834/20211101-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/10/29154834/20211101-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/10/29154834/20211101-MEM-Eng-1-400×300.png 400w" width="650"/></a>If you’re thinking of <a href="https://www.simplifyingthemarket.com/2021/10/01/reasons-renters-buy-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">renting</a> for another year, consider that rents will likely be even higher next year. But that alone doesn’t paint the picture of the true <a href="https://www.simplifyingthemarket.com/2021/09/23/two-reasons-why-waiting-a-year-to-buy-could-cost-you/?a=712984-fa409495d5d70154d03a25e81e9540e2">cost</a> of renting.</p>
<h4><strong>The Money Renters Stand To Lose This Year</strong></h4>
<p>A homeowner’s monthly mortgage payment pays for their shelter, but it also acts as an investment. That investment grows in the form of <a href="https://www.simplifyingthemarket.com/2021/01/06/the-importance-of-home-equity-in-building-wealth/?a=712984-fa409495d5d70154d03a25e81e9540e2">equity</a> as a homeowner makes their mortgage payment each month to pay down what they owe on their home loan. Their equity gets an additional boost from home <a href="https://www.simplifyingthemarket.com/2021/10/19/what-does-the-future-hold-for-home-prices/?a=712984-fa409495d5d70154d03a25e81e9540e2">price appreciation</a>, which is at near-record levels this year.</p>
<p>The latest <a href="https://www.corelogic.com/intelligence/homeowner-equity-insights/"><em>Homeowner Equity Insights</em></a> report from <em>CoreLogic</em> found homeowners gained significant wealth through their <a href="https://www.simplifyingthemarket.com/2021/10/22/your-home-equity-is-growing-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">home equity</a> this past year. The research shows:</p>
<blockquote>
<p><em>“. . . the average homeowner gained approximately $51,500 in equity during the past year.”</em></p>
</blockquote>
<p>As a renter, you don’t get the same benefit. Your rent payment only covers the cost of shelter and any included amenities. None of your monthly rent payments come back to you as an investment. That means, by renting this year, you likely paid more in rent than you did in the previous year, and you also missed out on the potential wealth gain of $51,500 you could have had by owning your own home.</p>
<h3><strong>Bottom Line </strong></h3>
<p>When deciding whether you should rent or buy in the future, keep in mind how much renting can cost you. Another year of renting is another year you’ll pay rising rents and miss out on building your wealth through home equity. Let’s connect today to talk more about the benefits of buying over renting.</p>
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