Vacancies have fallen significantly since they peaked in 2009 as more Americans choose to rent, rather than purchase, housing. NAREIT vice president of research and industry information Calvin Schnure recently stated that demand for rentals has grown to the highest level seen since 1993 as Americans have begun to form new households and disperse.
During the economic downturn, many lived with families or friends rather than striking out on their own, Schnure notes. With new jobs becoming available and the economy improving, however, these individuals are now seeking their own housing. At the same time, many former homeowners are finding single-family rentals can meet their housing needs better than apartments, and that portion of the industry is seeing more activity than in the past.
Schnure indicated that first-quarter increases in rental occupancy can be partially attributed to Americans signing leases after benefitting from the improving jobs market, noting that such people may constitute enough demand to account for the current supply of rental properties. This suggests rental managers should see relatively high occupancy and profitability for the time being.