Apartment Demands And Rents On The Rise, But Still Cheaper Than Owning A Home
July 23, 2019
(Industry Intelligence Inc.)
– The demand for apartments in the U.S. are on the rise, but most renters say it’s still more affordable than owning your own home.
That’s the discoveries of RealPage, a real estate software and analytics company, and Freddie Mac. RealPage research found that apartment demand in the second quarter of 2019 rose 11% from a year ago. That, in turn, pushed rents up an average 3% nationally to $1,390 per month.
“Demand is proving especially strong in this year’s primary leasing season,” according to Greg Willett, RealPage’s chief economist. “Solid economic growth is encouraging new household formation, and rentals are capturing a sizable share of the resulting housing demand. At the same time, loss of existing renters to home purchase remains limited relative to historical levels.”
Despite the increase, however, a record 82% of renters say renting is more affordable than owning, according to a new survey from Freddie Mac, up from 67% a year ago.
“Affordability remains the essential factor when it comes to determining whether to rent or purchase a home, and the cost of housing is having a significant impact on households of every age, size and location,” said David Brickman, president and CEO of Freddie Mac. “For millennials and many Gen Xers, buying a home is no longer just a decision based on housing and housing costs – increasing pressure from student loans and the rising cost of child care are having a significant impact.”
Rental demand is currently highest in the nation’s largest cities, with Dallas/Fort Worth, Chicago, Houston, New York City and Washington, D.C., leading.
“The metrics that we’ve seen this year have been off the charts,” said Toby Bozzuto, CEO of The Bozzuto Group, which currently has over $1 billion worth of residential, Class A construction in the works across the North and Southeast.
“I think millennials ultimately aspire to have homes. I think it’s still the American dream, but I call it the dream deferred and it’s deferred because of student loans, the lack of having a large amount of equity, and they also enjoy flexibility versus fixity,” Bozzuto said. “This is a generation that likes a sharing economy. They use Uber instead of their own car, so apartments appeal to their needs, flexibility and their desires.”
Nevin Barich is the Consumer Products Analyst for Industry Intelligence, which can help YOU better address your own industry challenges. We invite you to come take a look at our service.Call us today at 310-553-0008 and we’ll schedule you for a 15-minute demo.