OfflineWith a lot of current news about improving conditions in the housing markets, many would assume that there are a great many renters moving back into the buying mode. However, that could be a mistake, as that really isn’t happening. There’s a shift in demographic trends that is influencing this situation and will likely favor the rental apartment market for the foreseeable future. While the article at nbcnews.com focuses on rental apartments, we can assume that the right smaller homes, and especially townhomes and condos could benefit as rentals as well.
It’s all about women. There’s been a shift in female education, marriage and fertility rates, and it will drive rental demand going forward. There’s a growing education imbalance between women and men with 3.1 million more women enrolled in college than men, and 4 million more college-educated women in the workforce than men.
These trends are creating a structural imbalance in the number of partners considered suitable by women. Women are leaving college with good income prospects and are not finding suitable husbands and fathers according to the article. Due to this situation, women are delaying marriage and motherhood, and birth and fertility rates are dropping. The Centers for Disease Control states that the female fertility rate is at its lowest level in recorded history. Additionally, the report states that 41% of children are now born out of wedlock.
There are still many who don’t believe this is a valid trend, and expect home sales to jump with more renters moving to be owners. However, Raymond James states in a recent report:
Rental household formation remains at the strongest level in decades. Roughly 1.32 million new renter households were formed in the past year, while the number of owner occupied households declined by 175,000. Resident turnover and move-outs to homeownership remain near historic lows for most operators, incoming leasing traffic is more than offsetting move-outs while paying higher rates.
All of this is great news for investors.
thanks for sharing! makes one think if the more sought after 3bed/2ba rental properties will also be replaced with 2B/1BA's? something to think about.... I know that in my area the 2B/1BA cottages in good areas sell very quickly nowadays, to mostly empty nesters who are downsizing...
Valerie
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Interesting. And I know of a town who is actually struggling to get enough rentals. Twice in the past 7 months they have been on the news as they are putting up apt buildings and rehabbing several others.
Also there are more ads popping up under wanted to rent.
There is money to be made at buy and hold.
Thanks for sharing.