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New real estate opportunity brewing as some Americans opt to rent, CEO says
Post Brothers CEO and co-founder Michael Pestronk examines the driving trend behind ‘forever renters.’
As economic woes continue to pummel the housing industry, one real estate developer is finding opportunities within a new market – the “forever renters.”
Post Brothers CEO and co-founder Michael Pestronk joined “Varney & Co.” Friday to discuss the real estate opportunity brewing in urban areas as some Americans are opting to rent instead of buying a home.
“The biggest issue, especially in large established metro areas, is a lack of product. There’s no such thing as a starter home in large [Metropolitan Statistical Areas] anymore. There’s no land available to build housing within commutable distances of jobs,” he explained.
Pestronk argued that “bigger” and “better” apartments are the ideal starter homes for those who live in big cities.
The real estate expert said that a portion of “forever renters” are of the “higher-end” demographic and have an eye for apartments with large scale rooms, sophisticated aesthetics and kid-friendly amenities.
“Most apartment buildings, especially over the last 10 years, have been built targeting a 27-year-old. And they have orange doodads as the design theme,” he told host Stuart Varney.
The Manhattan skyline is seen at sunrise from the 86th floor observatory of the Empire State Building on April 3, 2021, in New York City. – The Empire State Building, a 102-story Art Deco skyscraper in Midtown Manhattan, opened during the Great Depre ((Photo by ANGELA WEISS/AFP via Getty Images) / Getty Images)
“We have a mid-Atlantic focused portfolio. Our average renter 10 years ago was 29. Today it’s 33. But we also have way more renters of the 35 to 45, making well over $150,000 than we used to have,” he said.
PAYING RENT STILL A PROBLEM FOR 24% OF RENTERS
The Post Brothers CEO said the rent could range from $4,000 to $8,000, arguing it’s “not inexpensive” but on the “favorable” end compared to the cost of owning a home.
“These buildings, especially the ones that we’re focused on, are in locations where there is no opportunity otherwise to build new housing because they’re completely infill, there’s no land available. And so they’re in the locations that are in the highest demand,” he expressed.
Pestronk said the concept has not only attracted millennials but empty nesters as well.
“The biggest part of this story is really that the millennial generation has come of an age and an income level, where in previous generations they would have been moving to the suburbs and buying houses, and they’re not,” he said.
‘Mansion Global’ host Katrina Campins analyzes the housing market and identifies which areas could explode when interest rates retreat on ‘The Big Money Show.’
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As we look ahead to 2024, many homeowners and prospective buyers are wondering what to expect when it comes to mortgage rates. The landscape of the housing market is constantly changing, so it’s important to stay informed about trends and predictions. In this blog post, we will discuss some factors that could impact mortgage rates in 2024 and what homeowners and buyers can expect.
One factor that could impact mortgage rates in 2024 is the overall state of the economy. If the economy is strong and growing, we may see higher mortgage rates as the Federal Reserve looks to combat inflation. On the other hand, if the economy is stagnant or in a recession, we may see lower mortgage rates as the Fed looks to stimulate growth. It’s important to keep an eye on economic indicators such as GDP growth, unemployment rates, and inflation to get a sense of where mortgage rates may be heading.
Another factor that could impact mortgage rates in 2024 is Federal Reserve policy. The Fed plays a key role in setting interest rates, and their decisions can have a ripple effect on mortgage rates. If the Fed decides to raise interest rates in response to inflation, we may see an increase in mortgage rates. Conversely, if the Fed decides to lower interest rates to stimulate growth, we may see a decrease in mortgage rates. Keeping up with the latest news and announcements from the Fed can give homeowners and buyers a sense of where mortgage rates may be heading.
In terms of specific cities and local mortgage companies, it’s important to note that mortgage rates can vary depending on location and lender. For example, in a city like New York City, where real estate prices are high, mortgage rates may be higher compared to a city like Indianapolis, where real estate prices are lower. Additionally, local mortgage companies may offer competitive rates and terms compared to national lenders. For example, in New York City, local lenders like Quontic Bank and CrossCountry Mortgage may offer specialized products and services tailored to the needs of local buyers.
It’s important for homeowners and buyers to shop around and compare rates from multiple lenders to ensure they are getting the best deal. Websites like Bankrate and LendingTree can be helpful resources for comparing rates and terms from multiple lenders. Homeowners and buyers should also consider working with a mortgage broker who can help them navigate the lending process and find the best mortgage product for their needs.
In conclusion, predicting mortgage rates in 2024 is not an exact science, but there are several factors that could impact rates. By staying informed about economic indicators, Federal Reserve policy, and local market trends, homeowners and buyers can make informed decisions about their mortgage. Shopping around and comparing rates from multiple lenders is key to ensuring you are getting the best deal on your mortgage. Whether you’re looking to refinance your existing mortgage or buy a new home, it’s important to stay informed and be proactive in managing your mortgage.
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