Freddie Mac’s U.S. Economic and Housing Market Outlook for June shows that rental market activity continues to be a bright spot for the housing market, with demand for rentals expected to increase this coming year.
According to Frank Nothaft, Freddie Mac VP and Chief Economist, “Further increases in rental demand are likely in the coming year as newly formed households postpone homeownership decisions until the economy strengthens and they have accumulated sufficient savings. Overall apartment market trends may show further vacancy declines and rent gains, with property values improving as well.”
Over the year ending March 2012, an additional 1.5 million households moved into rental housing, a 4 percent increase in a single year.
Rental vacancy rates have dropped roughly 2 percentage points over the past two years.
Rents are rising, but the market is still recovering. While nominal rents rose (2 to 4 percent) during the year ending March 2012, average rent on an inflation-adjusted basis remained below where it had been for much of the decade prior to the Great Recession.
Multifamily property values are up on average about 25 percent during the past two years from their trough during the first quarter of 2010, according to the National Council of Real Estate Investment Fiduciaries index, but still about 14 percent below their peak prior to the Great Recession.
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.
