There’s no question that America is becoming a nation of renters. According to the latest data from the U.S. Census Bureau, the homeownership rate has been declining for more than a decade, and now stands at just 63.9%. That’s the lowest level since 1967.
There are a number of reasons for this shift, but one of the most important is that millennials (those born between 1981 and 1996) are much more likely to rent than previous generations. In fact, nearly half of all millennial households are now renting, compared to just over one-third of baby boomer households.
There are a number of reasons why millennials are more likely to rent than previous generations. For one thing, many millennials came of age during the Great Recession and have been reluctant to enter the housing market since then. In addition, many millennials have student loan debt, which makes it difficult to save up for a down payment on a home.
Whatever the reasons, the reality is that more and more Americans are finding themselves in rental property. And this trend is likely to continue in the years ahead.
So what does this mean for investors?
This is great news for investors who are interested in multifamily options. The demand for rental units is only going to increase in the coming years, so now is the time to start investing in this growing market:
1. More people are renting than ever before.
In 2018, 36.6% of American households were renters, up from 31.2% in 2007. This trend is being driven by a combination of factors, including the increasing cost of homeownership, the rise of the gig economy, and changing demographics (more millennials are reaching adulthood and many are choosing to rent instead of buy).
2. Rental demand is strong and growing.
According to the National Multifamily Housing Council, the number of renter households increased by 4 million between 2007 and 2016. This trend is expected to continue, with the number of renter households projected to grow by another 11 million by 2030.
3. Rents are rising.
As demand for rental properties has increased, so have rents. According to the National Association of Realtors, the average rent for a one-bedroom apartment rose from $780 in 2007 to $940 in 2017, an increase of 21%.
Investing in multifamily rental properties can be a smart financial move. These properties tend to appreciate in value over time and can provide a steady stream of rental income. They also offer the potential for tax breaks and other financial benefits.
With the right location, the right units, and the right prices, you can be successful in the booming rental market. So start your search today and find the perfect multifamily property for your investment portfolio.
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