Rental Market Softening
Homeownership Slump Drives Rental Construction to 25 Year High
The main reason for this is that overall home ownership in the U.S. fell to 64.7 percent in the second quarter, the lowest rate since 1995.The decline in home ownership has been primarily concentrated among younger households- the millennials.. Among households under age 35 it has fallen from 43.6 percent in the second quarter of 2004 to 35.9 percent ten years later.
So as economic event have improved and people are moving out on their own, they are not home buyers- they are renters.
Rent growth of 9 percent over the period from December 1999 to June 2014 is reported. This figure has varied across metropolitan areas with rent growth generally highest in large metros and those in the West or Northeast.
What does this mean for us?
- Builders are not building single family houses in a big way- it’s apartments. The single family market will remain tight without massive building.- good for renting and selling.
- Builders are not building cheap units- its luxury ones. So lower priced units will remain in high demand. Income is not rising much so demand for these units will remain high.
