The Shortcomings and Limitations of the Modern Housing Model

Young adults often lack the capital required to enter the homeownership market. In addition, it may not be advisable to purchase given that relocating for education or work opportunities can be more beneficial for their financial future. Renting can provide easier mobility for a young adult just starting out in their career. We are currently facing two crises in the housing market: the rental market and the homeownership.

Rental Shortcomings

For renters, increasing rental costs and limited supply make it difficult to find affordable and suitable housing. Most rental agreements are typically short-term which can result in frequent moving and which can be disruptive to one’s daily life. A landlord could suddenly decide to sell the property as well, forcing a renter to move. In addition, renting does not provide the same degree of control over the actual living space. Renters may often be limited in their ability to make changes or improvements to the living space. Finally, and perhaps most significantly, renting does not offer the opportunity to build wealth.

Limitations to Homeownership

For aspiring homeowners, the price of real estate has become increasingly expensive, making it difficult to save for a down payment. In many areas, there is a shortage of housing, making the demand go up for the limited supply. With high demand and limited supply, buyers can face stiff competition from other buyers, including investors who may have more resources at their disposal. In addition, a strong credit history is required to secure a mortgage, and the younger you are the less time you have had to build credit, which could make qualifying for a mortgage or securing optimal rates difficult.