Robust growth in Single-Family homes boost rental market
US Single-family homes, known to be the sub-sector of the rental market, have been growing rapidly. According to Statista Research Department, Single-family dwelling units closed at a record high of 208.4 million while multifamily units recorded only 37.8 million in October 2021. Ever since the remote work scenario prevailed, Americans have been opting for spacious accommodations, which has spiked up the housing demand. But higher prices are affecting housing affordability for first-time buyers.
Rental housing is an attractive alternative for institutional investors such as insurers and pension fund holders as it is secure and has steep down payment requirements. Despite limited housing inventory, there has been a surge in demand for SFH. Home prices are determined by demand-supply forces, which drive housing affordability. More families are opting for single-family rentals as they have higher tenant retention rates than multifamily homes. Currently, Single-family rental community is emerging as the hottest corner of US property market.
Millennials and Gen-Z are competing with the old in the hottest US rental market as there has been a steady rise in young people getting their own places in the last five years. Due to supply-chain disruption and lack of housing supply, new home seekers are facing a crisis.
As per the NAR report, “West and South are the hottest rental markets now. More renters are moving to Dallas and Houston in Texas, followed by Atlanta, Georgia, New York, Los Angeles, Austin, Phoenix, Arizona, and Washington, D.C.”