THE RISE OF RENT-TO-OWN MODELS: OPPORTUNITIES AND CHALLENGES
Keywords:
Rent-to-own, Homeownership, Real Estate Market, Housing Affordability, First-time Buyers, Mortgage Lending, Financial Barriers, Credit Building, Alternative Ownership ModelsAbstract
The growth in rent-to-ownership has become an emerging phenomenon in the United States as its total factors change the structural nature of homeownership for people who could be otherwise locked out from the formal channel of accessing homes through purchase. This paper seeks to discuss the main issues that emerged when first-time homebuyers entered the industry, which include the following: high home prices, high interest rates, low wages, and restrictive credit protocols, all of which have made homeownership a dream that has become virtually impossible to achieve. A rent-to-own arrangement is a hybrid between renting and owning, which includes quality and affordability, easy qualification or credit check, and saving on rent through a well-structured payment plan for acquiring the house. However, it also has some drawbacks, such as high rental costs, defaults, and fluctuations in the stock market. This article looks at the prospects of RTA plans to increase homeownership, significant participants in the industry, and possible ways for regulating and boosting consumer advocacy. Finally, it examines the prospects of rent-to-own models in the United States, the continued development and regulatory policies, and the education of the client base to foster sustainable future usage of these models
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