Homeownership is rising, which is sending chills in the residential rental market. After a long stretch near the top of the commercial real estate industry, the rental market has slowly started to decline, primarily due to many millennial’s making homeownership a reality. The demand for rental properties in the past has been fueled by people that haven’t had the money, credit, or even the desire to pursue traditional home ownership, but now, amid a hot housing market, homeownership rates are now rising across the country. Millennial’s are now reaching the age where they are forming families and starting to settle down.
According to the Census Bureau, home ownership increased 63.9% in the third 1:45 thousand 17. That was the highest level since 2014. This rate was up from 63.7% in the second quarter and 63.5% just one year ago.
This recent trend in homeownership is causing investors to wonder whether the rental market is still viable income resource. Investors chose the recovery. To build and by apartment complexes, multifamily properties, and rental homes to increase their large portfolio of rental properties. But now, the slump is starting to hit. According to the American Homes 4 capital went, there was disappointing revenue growth for the third quarter. This company owns more than 50,000 single-family properties across 22 states. Up until now, there has been a steady rise in rental markets across the US. These larger companies are suspected to feel the burn before individual investors because they likely own properties and more affordable, non-urban markets. Many of these renters have already opted into programs that make home ownership a reality.
However, if you’re planning on investing, the homeownership rate is still well below the historic norm of 65% so investing in multifamily properties can still be a valuable asset. “The rise in homeownership comes as other forces weaken the rental market, including a surge in supply from developers hoping to cash in on rising rents.” [Source]
While homeownership becomes a reality for many millennial’s looking to settle down, the need for rental properties is still out there. Whether you are investing in multifamily properties, commercial properties, or looking for a home of your own, contact our office for properties throughout Northern Virginia.