Rental housing leads market improvements

Confidence in the single-family home construction market increased for the fifth consecutive month, according to the National Association of Home Builders (NAHB), reaching its highest level in four years.

Some analysts believe this is a telling sign for 2012, with Barclay’s Capital suggesting spring will be a relatively strong selling season. Capital Economics, on the other hand, sees it as a precursor to a burgeoning turnaround in real estate, although they noted it would take time for the market to stabilize.

More favorable indications came out for rental housing, however. Capital Economics’ analysts indicated the sector could see as many as 850,000 new households over the course of the next few years, keeping demand high.

Such an influx could support high rents at a time when interest is already causing low vacancy rates and encouraging new construction. Efforts to convert foreclosed homes to rental properties may help meet this demand, although owners may need skilled property management services in order to run their housing well.