The homeownership rate is at it lowest point since 1965 at 63.4%.
Across the board, homeownership rates for all age groups is on the decline. Specifically, in the age group under 35 we are seeing the largest decrease. This may be occurring for a variety of reasons including:
- income not keeping up with increasing real estate prices
- a new cultural norm of no longer having the American dream be “owning your own home”
- The new sharing economy with companies like Airbnb entering the market
With homeownership rates on the decline, we are seeing more people moving into rental units. The vacancy rate is currently hovering around 7%.
Even though we are seeing an increase in rental demand, we are also seeing a dramatic increase in supply entering the market. With the increase in rental supply, we will soon see supply outweighing demand. In most markets, we should start seeing a decrease in rental rates, an increase in rental concessions and an increase in the overall vacancy rates.