Slumping Home Sales Bode Well for Apartment/Home Renting
The housing market’s momentum is decreasing, according to an article by The Wall Street Journal’s Ryan Dezember. Sales of existing homes in September dropped 4.1 percent from the previous year, said the National Association of Realtors. This statistic in addition to a handful of others, imply the declining momentum of the housing market.
Mortgage rates recently rose to the highest they have been since the foreclosure crisis in 2011. These increasingly high home prices are a factor in the decreasing popularity for home buying. In only six months the percentage of Americans who view renting as the more affordable option has risen by 11 percentage points. More and more Americans are not looking to buy.
However, this poor outlook for the housing market is a plus for the apartment industry. For example, apartment investing company AvalonBay Companies is up 7.4 percent over the last six months.
“Having pressure on home sales is a positive for the rental side of the industry. It should all fare very, very well for pricing power going forward… The insulation for the rental landlord looks pretty good heading into next year.”
Apartment rental numbers are increasing. Millennials in their 20’s and 30’s are a huge factor in the rise in apartment renting. Affordability and flexibility are huge pluses for this age range looking for housing. Regardless, there is no doubt that this renting trend is on the rise, and apartments across the country stand to benefit.
[Via Wall Street Journal]Posted on Monday, December 10, 2018