The most recent census data shows that the number of US households that rent versus own has increased by 1.4 million over the last twelve months.
This brings the number of renters to 38 million by halfway through this year. According to data reports that measure single-family and multifamily housing rates, the vacancy rate for rentals now stands at over 9 percent. Vacant housing (that which is available to rent) is now descending to its lowest since 2002.
Although housing prices and the cost of borrowing money is the lowest in years,many renters cannot take advantage of the opportunities to buy a home in today’s market. Lenders have simply raised the bar too high. Those that are able to pass the stricter lending standards by banks, have already purchased homes, for the most part. Additionally, many households that have become involved in foreclosure proceedings, have also been forced into the rental market. In fact, some 600,000 fewer households this year are homeowners, according to recent data.
Due to the higher demands for rental properties, monthly rental rates have begun to rise. Because there are fewer new homes on the market and new construction of apartments has dwindled, rents are expected to continue their increase. The Consumer Price Index showed that rents have already increased by over 2%, since this time last year, and show no signs of leveling off. These increases signify good news for real estate investors. The prospect of higher monthly rents make more sense to those interested in becoming landlords, while prospective renters will need to become more diligent in their search for the perfect (rental) home.