3 thoughts on “Despite being out of reach for many Americans, single-family housing is relatively cheap”
Redfin news release
U.S. Homeowner Population Stops Growing for First Time in Nearly a Decade
•The number of homeowner households fell 0.1% year over year in the second quarter—a small decline, but the first since 2016.
•Meanwhile, the number of renter households rose 2.6%—one of the biggest increases in recent years.
The number of homeowner households in America fell 0.1% year over year to an estimated 86.2 million in the second quarter. While that’s a marginal decline, it’s the first since 2016.
I am finishing up working on a new loan that is a straight refinancing.
The new loan is a 30-year fixed with a 5-year prepay at 6.25%. The loan comes out to be about 55% LTV. I’m not taking out any cash. It replaces a 7.825% loan on the same property. I took the original loan out just under 25 months ago and I’m paying a 3% prepay penalty.
Even though I’m paying a 3% prepay, the refinancing more than makes up for any penalty. The interest rate on the new loan is 157 basis points less than the current loan.
That is a huge difference and anything more than 100 to 125 basis points makes the refinancing worthwhile, as long as I intend to own the property for at least five more years; which I do. This property will be an indefinite hold and I have no plans on selling it. It is quickly becoming a nice cash cow for me.
Since I took out the original loan two years ago, I’ve paid down about 10% of the loans principal balance, while I was able to increase the rent this year by $550.
Thus, my rental income will increase by almost $850 a month since last year. This same time last year, my rental income was zero. Through fixing up the property and doing some financing, my rental income will increase $10,000 a year on that one house.
Redfin news release
U.S. Homeowner Population Stops Growing for First Time in Nearly a Decade
•The number of homeowner households fell 0.1% year over year in the second quarter—a small decline, but the first since 2016.
•Meanwhile, the number of renter households rose 2.6%—one of the biggest increases in recent years.
The number of homeowner households in America fell 0.1% year over year to an estimated 86.2 million in the second quarter. While that’s a marginal decline, it’s the first since 2016.
https://www.redfin.com/news/homeownership-rentership-rate-q2-2025/
Just an FYI for my fellow SFR investors…
I am finishing up working on a new loan that is a straight refinancing.
The new loan is a 30-year fixed with a 5-year prepay at 6.25%. The loan comes out to be about 55% LTV. I’m not taking out any cash. It replaces a 7.825% loan on the same property. I took the original loan out just under 25 months ago and I’m paying a 3% prepay penalty.
Even though I’m paying a 3% prepay, the refinancing more than makes up for any penalty. The interest rate on the new loan is 157 basis points less than the current loan.
That is a huge difference and anything more than 100 to 125 basis points makes the refinancing worthwhile, as long as I intend to own the property for at least five more years; which I do. This property will be an indefinite hold and I have no plans on selling it. It is quickly becoming a nice cash cow for me.
Since I took out the original loan two years ago, I’ve paid down about 10% of the loans principal balance, while I was able to increase the rent this year by $550.
Thus, my rental income will increase by almost $850 a month since last year. This same time last year, my rental income was zero. Through fixing up the property and doing some financing, my rental income will increase $10,000 a year on that one house.
That’s a great deal, congrats. 10k a year increase on one house is insane, no way that happens in my area.