Harvard’s Joint Center for Housing Studies has released a new report entitled, “The State of the Nation’s Housing 2012″ that evaluates the nation’s housing markets, demographic drivers & trends, and ongoing housing challenges. The report is available in its full version, or by chapter. Chapter 5 of the report focuses on the state of our nation’s rental housing market, which continues to be a “bright spot,” according to the report. Some insights from the chapter include:
- Increased demand for rental housing has been driven by disproportionate shares of young and lower-income households, as well as the severity of the foreclosure crisis.
- As the economy continues to recover, the rental housing market will likely see another boost in demand as a result of the large “echo-boom” generation — young adults beginning to live independently.
- Rapidly rising demand means rent increases have outpaced inflation in a majority of markets.
- Multifamily property values are stabilizing — prices were up approximately 10% in Q4 2011 from a year earlier.
- Financial institutions grew their rental investment portfolio by $5.8 billion in 2011; insurance companies grew by $2.3 billion.
- Renter household growth and multifamily construction starts should continue to strengthen.