Dec 10, 2018 Walt Wojciechowski
Renters - a number of whom may be unbanked or underbanked - often face an uphill climb pursuing homeownership, as unabated price increases continue. According to the National Association of Realtors, the current median cost for an existing home is $247,000. Rents are also increasing, which makes seeking out an alternative apartment less appealing for many. In a bid to shore up their spending power, more renters are re-upping on their leases - and saving big as a result, making them strong potential lending candidates, recently released figures suggest.
"Renewing renters are spending less on rate increases."
Renters who decided to change addresses in 2015 - the latest year for which data is available - paid nearly $3,950 more than those who decided renewing their leases was the best move, according to real estate property listings website Zillow. Apartment rents having risen sharply, up 5.6 percent in 2015. Rents for renewing tenants have also ticked higher, but to a smaller extent, up 3.6 percent compared to 2014. Svenja Gudell, Ph.D., chief economist at Zillow, noted many renters face a binary choice: Re-up or seek out greener pastures. Perhaps the only thing they'll find that's greener is more dollars. "With the country in the middle of an affordability crisis, it's important for renters to understand how much they can save if they renew their lease instead of finding a new rental," Gudell explained. "Nationally, rental rates have slowed and the savings from renewing are not as significant for renters today. However, in some of the hottest rental markets, where rents are still rising aggressively, continually renewing a lease can mean saving thousands of dollars." Some renters saved $9,000
Indeed, renters who decided to stay put in markets like Boston, San Jose and San Francisco wound up saving roughly $9,000 in annual payments. Renters can get on firmer financial footing by seeking out saving opportunities so they can more easily make rent come the first of the month. Rent payments are among the factors used in alternative credit score assessments. Microbilt is a pioneer in the alternative credit data universe, helping businesses make well-informed lending decisions to the unbanked and underbanked. Let Microbilt help you improve your vetting process with our suite of risk assessment resources.