Experts Predict 1.7 Million New Renters
According to a report by the Multifamily Research Group of Freddie Mac, landlords can expect steady, slow economic growth with an additional 1.7 million new multifamily renter households between now and 2015.
In addition, the paper forecasts that the multifamily market and demand for rental housing will remain solid and healthy during the same period of time.
The forecast analyzes demographic trends, housing supply and economic data. The scenario-based approach explores rental market conditions under different economic environments: slow growth, no growth and accelerated growth.
Recent declines in homeownership related to economic stress and high foreclosures in the single-family housing market have benefited the multifamily market.
The homeownership rate will drop 1 to 2 percentage points if the current slow recovery continues.
The single-family rental market, a growing and distinct market from multifamily, has expanded 16 percent (about 3 million units) since 2007.
Multifamily market demand is expected to be strong through 2015 primarily due to demographic trends and a decreasing national homeownership rate.
Rental demand will continue to grow faster than historical averages.
Multifamily demand is likely to be 1.7 million new renter households between now and 2015 (slow growth prediction). If the economic recovery accelerates, demand will be in 1 million new renter range; and if no recovery, then in the 1.6 million range for new renters.
“The research supports the optimism that currently pervades the multifamily market,” explains David Brickman, senior vice president of Freddie Mac Multifamily. “It confirms that multifamily is a bright spot in in the real estate market and the economy more broadly, and it will likely continue to shine for quite some time.”
“The economic data indicates that current rental markets are very strong with low vacancy rates, rising rents and solid demographic trends,” Brickman continues. What this research demonstrates is that these conditions are likely to remain in place for several years to come.”
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