The residential rental market continues to grow around the nation and in the Metropolitan region. Vacancy rates are record lows and rents near record highs have not had any immediate effect on individuals purchasing versus renting a residence.
Freddie Mac Multifamily Research Group released its multifamily real estate market demand forecast for the next several years. The paper forecasts a base case that entails slow economic growth with an additional 1.7 million new multifamily renter households between now and 2015.
In addition, the paper forecasts that the multifamily market and demand for rental housing will remain solid and healthy during the same period of time of accelerated growth.
The forecast highlights of the report:
- Recent declines in homeownership related to economic stress and high foreclosures in the single family housing market have benefited the multifamily market.
- The homeownership rate will drop 1 to 2 percentage points if the current slow recover continues.
- The single family rental market, a growing and distinct market from multifamily, has expanded 16 percent (about 3 million units) since 2007.
- The multifamily market demand is expected to be strong through 2015 primarily due to demographic trends and a decreasing national homeownership rate.
- Rental demand will continue to grow faster than historical averages.
- Multifamily demand is likely to be 1.7 million new renter households between now and 2015 (slow growth prediction). If the economic recovery accelerates, demand will be 1 million new renter range; and if no recovery, then in the 1.6 million range for new renters.
David Brickman, SVP, Freddie Mac Multifamily said, "the research supports the optimism that currently pervades the multifamily market. It confirms that multifamily is a bright spot in the real estate market and the economy more broadly, and it will likely continue to shine for quite some time.
"The economic data indicates that current rental markets are very strong with low vacancy rates, rising rents and solid demographic trends. What this research demonstrates is that these conditions are likely to remain in place for several years to come."