What does bump in renters mean for housing market?
The real estate market may be starting to stabilize, but that doesn’t mean people are rushing out to purchase a new home. If you follow the market closely, it’s already apparent that the number of home owners has been in a steady decline over the last decade, but that doesn’t mean the houses are sitting vacant and losing value. Many Americans are exploring alternative home owning options, such as renting and subletting.
A recent report published by the Census Bureau shows that homeownership has dropped to a record low while renting has peaked at a fifteen year high. In the first quarter of 2012, 34% of all American households were comprised of renters. Even better, vacancies for both homeowners and rentals are down, which is a positive indicator for the housing market.
Of course, this is great news for those who have been considering managing rental properties, but it also speaks volumes for the current economic situation. The influx of renters is a positive sign for the recovery of the housing market because it means that more people are looking into living in their own home, even if they are unable to do so right away. Many renters cited that they were forced to rent because they lacked credit or didn’t have enough money to put a down payment on a house. The good news is that many of these renters are younger Americans on their own for the first time, due to a drop in unemployment rates for the 25-35 age group. For the first time, young adults are finally able to move out of their parent’s houses and form their own household.
While renting continues to be popular, it might make finding rental properties harder, but it means that there are more available options for house seekers. And while the market is reforming, it with be the single-family households that are dominating the scene.