The rapid rise in demand for multifamily units has caused the longest period of rental market tightening since the 1960’s, so says report by the Joint Center for Housing Studies at Harvard University in their State of the Nation. Released this week at a national press event in Washington D.C., the “The State of the Nation’s Housing 2016” highlights changes in the United States housing market during the previous year, it then compares these trends to data from the past decade to identify broader economic effects. Topics discussed in-text included affordability, supply and demand gaps, as well as market growth.
Emphasized in the report was a projection that the last 10 years have been very good to multifamily investment. The number of households that identified as rental units reached the highest example of 10-year growth on record, suggesting a dramatic increase in the number of people looking to rent. Research into 2015 data found that over 36% of current US households are renting, accounting for over 110 million people nationwide. Data also showed that the age of who was renting had surprising results, with nearly 34% being led by individuals above the age of 50.
In spite of this gradual increase in households choosing to rent, there are still availability issues plaguing the market. Many metro areas including San Diego were found to have a 1:5 ratio of available, affordable units to low-income households seeking them. In addition, multifamily spaces that had large family accommodations were more difficult to find. These factors have resulted in a five year market tightening that has not been seen in over fifty years. Overall, multifamily investors across the country are seeing value in their multifamily properties thanks to low vacancy rates and climbing returns. The report concluded by suggesting that rental demand is only looking to grow as millennial generations continue to seek affordable places to live.
Access to the full report ‘The State of the Nation’s Housing 2016’ can be found HERE
To read only ‘Chapter 5: Rental Housing’ can be found HERE
