Are You Prepared for the Growth in Rental Demand? Based on a recent analysis by The Urban Institute, homeownership rate is on the decline in the US. The homeownership rate is expected to continue to decrease until 2030. According to The Urban Institute’s report, from 2010 to 2030 the rental household will exceed that of homeowners by 4 million; with an increase of 13 million rental households and 9 million homeowner households. To put it in prospective, that is a ratio of 5 renters to every 3 homeowners.
The Urban Institute also reported that the homeownership downward trend has been on-going since the 90’s. By 2030, only 38 percent of the total population will be homeowners. To supplement the increase in renter population, there will be a need for more supply in the market. However, the last major boom in rental housing construction was back the 1980s. The current state of rental construction has been much slower.
Government agencies and developers must work closely together to close the gap of supply and demand. Otherwise, when combining the expected influx of renters in the market with slow growth in supply, rental rates is poised to continue to rise in the coming years and possibly price out many renters in numerous across the nation.