Amid an uptick in the housing industry, the home-ownership rate is now increasing, to a certain extent because millennial’s are reaching the age when they’re forming families and settling down. On the flip side, that development has helped create a slump inside the residential rental market.
Millennial home buyers release chill throughout rental industry
For the majority of the present economic expansion, declining home-ownership rates have led apartment owners to raise rents far quicker than the speed of inflation. However the Census Bureau last week reported that home-ownership increased to 63.9% in the third quarter – the largest level since 2014.
Analysts and investors now are wondering if the rental market’s good times are ending.
Still, the home-ownership rate remains below its historic norm of 65%, and future growth may very well be slowed by forces which include rising mortgage loan interest rates and last week’s tax code overhaul proposed by House Republicans. Nevertheless the surge in home-ownership has come about as other forces weaken the rental market, including a surge in supply from developers trying to take advantage of rising rents.
In September, the seasonally adjusted rate of apartments being built was 596,000, nearly twice the long-term average of 300,000 units, as outlined by U.S. Census data.
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