More data has been released supporting the theory that 5 to 6 million new renting households will flood the market in the next few years.
The Department of Housing and Urban Development recently announced a 25.5% jump in construction starts over last year for properties containing five or more units. And multifamily permits in July displayed a whopping 13.5% increase over June numbers.
In addition, multifamily loan originations posted quarterly and annual increases, growing 22% from 2013 Q1 to Q2. It seems as if multifamily housing is the new darling of the market!
Since the aftereffects of the housing bubble left millions of homeowners on the wrong side of a foreclosure, there’s a new demographic driving the increase in demand for
multifamily housing. And this need to accommodate a rapidly expanding group of renters has been a fundamental driver in the multifamily growth we’ve witnessed over the past year.
Plus with the unemployment rate dipping to 7.4% in July, the lowest since December 2008, consumer confidence is building, making way for more new multifamily opportunities.
If you’re a property manager, you may want to consider increasing the size of your portfolio with multi-unit housing to take advantage of the wave of new renters that could flood the market during the next few years. Especially after the surge of housing data that reinforces this expectation.