What will luxurious amenities in Charlotte’s new apartments cost you?
Amenities at Charlotte’s new luxury apartments aimed to attract educated millennial’s include full fitness studios, saltwater pools outdoor grills. But beware, as rising rents outpace both inflation and wages, Charlotteans who rent are spending more of their income. The proportion of rent as a percentage of the area’s median wages shot up from 22.7 percent to almost 30 percent of the median wage last five years.
Apartment tracking firm Real Data’s semiannual report, recently released by the Charlotte Observer, shows the record-breaking apartment construction around Charlotte is accelerating. Here are the key numbers:
- The average monthly rent in Charlotte is $1,000, up 6.6 percent from $938 in March. Highest average rent: Uptown, at $1,712
- The vacancy rate is 5.7 percent, down from 6.7 percent in March.
- Charlotte has 12,334 apartments under construction. An additional 13,503 are planned but haven’t started construction yet.
- Same-unit rents are forecast to grow 3 percent in the next year
The strong rent growth, jumping faster than inflation and wages, shows landlords aren’t having any trouble making a profit off of things that look shiney and new.
If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment.
Buying A Home Is Better Way to Produce Wealth Than Renting
There are many benefits to homeownership. One of the top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.
Homebuyers who purchased their home over the same five-year period locked in their housing costs and were able to grow their net worth as home values have increased and their mortgage balances have gone down.
These charts shows the increasing gap in building wealth between renters and homeowners. Studies reveal homeowners will have an average of 40 times the wealth of renters.
Know Your Options
Tired of your current home? Hearing how home prices are on the rise and interest rates are favorable? Increasing Charlotte rent have you concerned?
Charlotte homebuyers are still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s market.
Most think a 20% down payment is always required and over 780 FICO Score. In actuality, there are many loans written with a down payment of 5% or less and average FICO scores of approved conventional and FHA mortgages are much lower.
If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able’, download the report or give us a call so we can help you understand your true options.
Bottom Line. Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. We can help you determine if you are eligible to get a mortgage.
Chris Carter is a licenced CPA and Broker/Owner of Carter Group Realtors. His goal is to educate Charlotte homebuyers and home sellers with up-to-date data and local Charlotte and Concord real estate market trends so they can make smart housing choices and get the most house for their money.