Some Transferees are easing into home ownership gradually in uncertain economic times.

Prior to 2008 all was well on the mortgage

and real estate scene. By late 2007,

however, the landscape that was once

lush deteriorated. In fact, it was damaged

to a point that hadn’t been seen since the

Great Depression.

Talk of a housing bubble was rampant, although it

didn’t seem to hit home with people until “it” happened—

the housing bubble burst. By most accounts,Foreclosure signs

that happened late in 2007. While collapses in the housing

 market aren’t unusual, they historically are confined

to regions (e.g., the Midwest, the South) or states. This

collapse was different. It involved the entire U.S.

With the burst of the housing bubble came a handful

of financial difficulties for homeowners. Many owed

more on their mortgage than their home was worth.

Mortgage foreclosure rates in the U.S. rose to the highest

levels in approximately seven decades. To make

matters even worse, the unemployment rate was high

During this time of economic hardship, people had

difficult decisions to make. With many people choosing

to relocate to find work, they lost equity, had to

sell their home for less than desirable prices—or even

worse, couldn’t sell their home at all. These problems

combined to force many people to reconsider their

housing choices when relocating.

Thus, the temporary renter was born.

Time Considerations

A temporary renter is just what it sounds like: a person

who plans to rent for a short period of time before

eventually purchasing. Having just gone through the

traumatic experience of the housing bubble burst, the

idea to jump right back into a volatile housing market

understandably didn’t appeal to most. Credit blemishes,

reduced equity, and fear that housing prices were

still falling prevented people from wanting to purchase

a new home. Most opted to rent and become familiar

with the new location, taking a test-drive approach.

Beth and Joe Spadafore are a married couple who

fit in the category of temporary renter. Beth, who

works for a national retailer, is the transferee on the

move. The couple owns a home in Michigan and is

moving to Illinois. Instead of purchasing a new home

right away, they will start off by renting.

“Coming from a volatile housing market in

Michigan, we weren’t overly confident in buying

right away,” Beth says. “We will buy a house again,

but we want to be more confident in the housing

market before we do.”

When a transferee relocates from one destination

to another, there is a lot to take into consideration.

It all starts with the relocation benefits the company

provides. These benefits can include household goods,

reimbursement for temporary housing and transportation,

real estate agent assistance, rental assistance, and

new-home closing cost benefits.

For the Spadafore family, renting first makes sense

with the benefits Beth gets through her company.

“Not knowing the area well enough and having 12

months to use our relocation benefits made it easier

to rent first,” she says.

While Beth’s employer allows its employees 12

months to use their relocation benefits, the time

frame differs from company to company. Some

companies are getting creative. For example, one

company has amended its one-year traditional

homeowner relocation program and extended the

benefit to two years. This allows the employee to

move within the first year but retain the home purchase

benefit through the second year.

This approach alleviates market fears. The policy

adjustments were made to give employees the ability

to rent first and not have it affect their eligibility for a

purchase at a later date.

Financial Considerations

From Michigan to Illinois to across the country in

California, fear remains a top reason for renting over

buying. According to Arlene McCort, director of

relocation for Safeway in Pleasanton, CA, people also

choose to rent temporarily because they want to sell

their departure home before purchasing a new one.

“Most people want to sell their home before buying

a new one because that takes a lot of uncertainty

out of the process,” McCort says. “There are

also other reasons to postpone purchasing. Those

reasons can stem from natural disasters like hurricanes

and floods. Before people can sell their home,

they first need to make the necessary repairs to get

it ready to be sold.”

While temporarily renting is a popular choice, it

comes with an expensive price tag.

“Because of short sale or fear of the market, the

rental market in California is competitive, and the

prices keep increasing,” McCort says.

According to Ray Martin of CBS MoneyWatch,

over the past 20 years, average annual rent in the U.S.

has increased about 80 percent at the same time interest

 rates for 30-year fixed mortgages have decreased

by 50 percent. In other words, even though it’s

increasingly becoming more expensive to rent than to

purchase, more people are playing it safe by renting.

“Out of every 10 homeowners that relocate, I’d

guess that half want to rent over buy short-term or

permanently,” McCort says. “By renting, you get the

opportunity to try out a few different areas before

making a concrete decision.”

Examples of temporarily renting when relocating

were few and far between prior to the housing bubble

burst. It used to be common practice for a transferee to

settle on purchasing a new home after spending a very

limited amount of time searching. It was a simple decision

because people knew they could go back home

and sell their old home in a short period of time.

People would come to the transfer destination for

the weekend, buy a house, and go back home and sell

their current home right away. There wasn’t a lot of

pressure to sell before buying because people knew

they had equity and could get mortgage financing.

Times have changed.

Decision Time

After relocating to a temporary home for a period that

typically lasts between six and 12 months, McCort and

relocation directors at other companies have found that

people end up buying within a short period of time.

McCort says it comes down to time.

“When relocating, it’s important to have patience

with the transferee and give them time,” McCort says.

“The benefits are still as robust as ever for someone

that wants to be a homeowner, yet patience is the key.”

So, what do you think? Is the fear of the market

worth paying increasingly high rent payments? Are

you a temporary renter who just plans to rent until

the economy gets better?

Is there enough “incent to rent,” or would you

rather take the plunge back into the housing market

and purchase a home?

As the dust settles and economic hardships

begin to subside, the choices transferees have to

make with regard to housing will become clearer.

However, until the anxiety around homeownership

diminishes, temporarily renting will continue to be

a viable option for transferees.


Tom Dempsey, CRP, is in business development with

Quicken Loans Relocation. He may be reached at +1 313 373

1725 or by email at