According to a report by the Harvard Joint Center for Housing Studies, there are fewer households that actually own the homes in which they live than at any point since 1998[1]. 33.6 percent of households are renters, and the analysts who conducted the study expect 3 million more renting households by 2015. Not surprisingly, this has had a negative impact on new construction in general, with single family home starts hovering around the same rate as in 1960, though apartment construction has climbed 115 percent since its October 2009 low.
While the new renting trend does not necessarily appear to be positive on the surface, some groups like the National Association of Realtors (NAR) believe that it could create a growing demand for commercial real estate moving forward this year and next[2]. Although there are plenty of existing single-family residences, NAR hopes that if the economy continues to improve and job creation does not slow that the demand for multifamily housing – apartment complexes rather than single-family homes – could spike later this year or in 2012. As lending conditions continue to tighten, more and more families may find that they are in a position where they must rent or finance a home creatively in order to have somewhere to stay.
Do you think that rentals are the next move to make in real estate?
Thank you for reading the Bryan Ellis Real Estate Letter!
Your comments and questions are welcomed below.
[1] http://www.forbes.com/feeds/ap/2011/05/24/general-us-the-new-renters_8482826.html
[2] http://www.marketwire.com/press-release/commercial-real-estate-markets-stabilizing-demand-growing-1518257.htm
