End of the Year
As the end of another year approaches, a conventional practice is setting aside time to reflect on how the past 12 months treated you, which could stem from interpersonal relationships to your financial decisions. As far as realty market trends, 2016 has seen the single-family rental market boom. Current trends show a rise in rental demand for single-family properties and rents increasing up to 6%.
Single-family rental investments are consistently rising, making right now the best time to invest in this burgeoning market. Multi-million securitization deals occur on a monthly basis, and 1 in 9 homes are becoming family rental properties.
Trending Toward Millennials
A trend that has been prevalent since the recession has been the lack of home buying, with the demographic skewing largely toward millennials. According to Moody’s Analytics, 18 to 34 year olds are more likely to rent than own a home. Factors for this shift in practice include the increased chance to accumulate debt, establishing a steady employment history and changing social patterns such as moving to densely populated urban centers.
In terms of geographic areas, it is noted that single-family renting is especially prevalent in the western and southern U.S. This is due to the foreclosure crisis, which especially affected the western portion of the country, along with a larger housing stock consisting of newer homes. In contrast, the upper Midwest, where the foreclosure bust was not as rampant, is not seeing a higher trend of renting.
Although the dust from the most recent housing bubble remains with the foreclosure crisis still playing out, as well as homeownership remaining relatively under pressure, this means a consistently good market for rentals. Across the country, rents are low relative to home prices that spans the national market. Entering the new year, you can expect a steady market for single-family rental properties.