JMAC’s experienced brokers see, first-hand, how their clients change over the years. But it is always good to see what is happening in other parts of the nation.
According to Zillow, across the country’s largest markets, nearly 14% of on-market renters have strong credit scores, and relatively high incomes. Nearly 14% could afford to buy median homes in their market.
Our brokers have seen, however, that home ownership is steadily declining across the U.S. In addition, housing markets with lower home ownership rates tend to have more financially qualified renters. For example, even accounting for the homeownership rate, Silicon Valley renters appear to be exceptionally qualified. So this begs the question, why are more people renting when they don't have to?
JMAC sees this in a number of geographic areas. In the Santa Clara valley area, for example, the ever-competitive technology market often sees programmers move from company to company. These professionals tend to rent until they decide if they want to settle permanently in that area. Our brokers have also noticed that people are marrying later and starting families later, two reasons that typically accompany homeownership.
Zillow conducted a study in which the company looked at the self-reported credit scores and incomes of renters to see which large housing markets have the most qualified renters. Zillow grouped the credit scores into strong and weak (strong is above 700) and income into higher and lower based on being greater than or equal to the monthly income necessary to afford a typical rental in the given area. San Jose was the only large market analyzed where the share of on-market renters with strong credit and high incomes exceeds the share of on-market renters with weak credit and low-incomes. Houston and Indianapolis, on the other hand, are examples of geographic areas where weak credit and income renters are more common.