People are Renting More Now Than the Last 50 Years

October 19, 2017 | Blog
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Renting is at its Highest Point in the Past Five Decades – Learn What This Means for the Multifamily Market

More households in the Unites States are renting than at any point since at least 1965, according to a Pew Research Center analysis of Census Bureau housing data. Here are some key takeaways from the new report, and what it means for the multifamily market.

The Current renting Level is Approaching 37% of Households

The share of households who are renting exceeds the recent high of 36.2% set in 1986 and 1988, and is approaching the rate of 37% that was last seen in 1965. The total number of households in the U.S. grew by 7.6 million from 2006 and 2016. But due in part to the lingering effects of the housing crisis, there was no real rise in the number of households who own. The number of households renting their home, however, increased significantly during that time, from 31.2% of households in 2006 to 36.6% in 2016. With more and more households renting, the demand for units within multifamily properties looks set to remain high. If you’re the owner of a multifamily investment, you should see continued high levels of occupancy.

Young Adults Continue to be the Most Likely of All Age Groups to Rent

In 2016, 65% of households headed by people younger than 35 were renting, up from 57% in 2006. Rental rates have also risen among those aged 35 to 44: 41% of households headed by someone in this age range were renting in 2016, compared to 31% in 2006. You can stay ahead of the competition by updating your property’s amenities to make sure it remains attractive to younger audiences. Think about modernizing kitchens and bathrooms, introducing smart technology features and adding communal spaces for residents to congregate and spend time together.

Home Ownership is Not Necessarily Undesirable to Today’s Renters

Despite the high levels of rental households, many people still aspire to own their own home. 72% of renters said they would like to buy a house at some point, according to a 2016 Pew Research Center survey. The main barrier to owning a home comes from financial constraints, with only 32% of those surveyed saying that they rent as a matter of choice. With renting being the preferred option for some, and the only choice for others who for financial reasons can’t buy a home, the multifamily market looks set to remain buoyant throughout the rest of 2017 and beyond. You can read the report in full here.

Wherever you stand in the multifamily market, this is good news. As a buyer, this means a multifamily property looks set to be a sound investment for the future. As an owner, you can look forward to continued high levels of occupancy if you keep your amenities updated. And as a seller, you can count on plenty of interested buyers when you bring your property to market, as well as a great return on your investment when you sell. When it comes to making sense of the real estate market, the team at 100Units.com are here for you. As highly driven and passionate multifamily property investment advisors, we take the time to evaluate your investment goals to help you attain the long-term success and results you want. Contact us today to get started.