Rental Market Is The Housing Market's Bright Spot:
When housing prices drop, sellers and buyers look for different options. 1.4 million households have decided to move into rental housing this year—a 4% rise of the number of tenants from last year. Home ownership has dropped 1.5% in that same time.
Most of this rental demand is being generated from young couples and newly built households who are postponing homeownership. But as always, this trend is like a pendulum and as demand for rentals increase, vacancy rates are dropping and rents rising. Look for new multi-dwelling constructions, higher priced monthly dues, and property sales on the rise.
“With rental demand rising and apartment economics improving, the multifamily sector is a positive signal for the U.S. housing industry,” writes Frank Nothaft, Freddie Mac’s Chief Economist, in the October 2011 U.S. Economic and Housing Market Outlook.