Over the past several years, rental appreciation has been greater than the appreciation of home values in many parts of the country. As that growth rate has slowed in recent months, however, it has had an effect on the rental market, and certain rental trends have started to emerge.
Rentals Are Becoming More Affordable
With rental appreciation being relatively flat in 2017 compared to recent years, renting has become a more affordable living option for many people. Rental appreciation has slowed in all but the hottest areas of the country — such as San Diego, Denver and Portland, OR — because the inventory of rental homes has increased dramatically. This has made renting an attractive option for many individuals looking for a new place to live.
Home Ownership Among Millennials Will Increase
Although homeownership remains at near historic lows, and it has fallen every year since 2006, people continue to buy new houses for the purposes of renting them out. This trend may soon change as an increasing number of millennials experience significant life events and develop an interest in buying their own homes.
While more millennials may develop an interest in becoming homeowners in the upcoming months and years, it doesn’t mean there will be a shortage of renters. There simply isn’t enough inventory to satisfy every want-to-be millennial homeowner. Nearly 70 percent of millennials who’ve been renters for 12 months or more earn less than $50,000 per year. Since this makes buying a home a dream for the future for many millennials, this generation’s shift toward becoming homeowners will be a slow and steady one.
Competition for Rental Homes in Urban Areas Will Intensify
As baby boomers downsize, they’re looking for smaller homes in neighborhoods they can traverse on foot easily. This typically means they’re searching for rental homes in urban areas and that rents have increased quickly in downtown locations.
The combination of low rental inventory and increasing rent means competition for rental homes in urban areas will intensify. Individuals with lower incomes will likely be forced into suburban areas to find affordable rental homes. This rental trend will mean more people will have to drive to work because public transit may no longer be as readily available. In response, the development of smaller rental homes located close to public transportation hubs is expected to increase throughout the remainder of the year.
Renters Seeking Modern and Traditional Amenities
As the use of technology has become more widespread in recent years, many consumers have started actively seeking out rental communities that have modern amenities, such as fast Wi-Fi service and charging stations. While modern amenities are becoming increasingly important, more traditional amenities like play areas and fitness rooms continue to be top priorities for many people interested in a rental home.
To learn about the amenities that are available at our rental communities, contact Triple Crown Corporation today!