In a recent article by, Gene Epstein, we are seeing a significant increase in demand for rental homes lately. “The American dream of owning a home is still alive, but it will be no more than a dream for a growing number of people over the next five years according to June’s reports on the housing stats.”
This is great news from a landlord’s perspective. Statistics are showing that approximately 69% of the population of households owning their home in 2004 has slid steadily from 69% down to 67.2% in 2010’s first quarter and is expected to slide down to 64% over the next 5 years.
On the other hand, these statistics show an increase in the rental rate which could go up to 36% by 2015. Considering that every percentage point is approximately 1.3 million households with an average of two people per household. This means that approximately ten million people will be renting homes over the next 5 years.
This is a great sign for investors that are considering purchasing over the next few years.
This could be considered a “perfect storm” for a landlord that owns property and could explain why the vacancy rate is lower than it has been in the past few years. The average vacancy rate of a rental property single family home in the East Valley built within the last 10 years is less than 30 days if priced correctly and is in presentable condition.
Although these trends are re-assuring signs for those trying to re-coop their money in rents, that’s not to say rental rates aren’t competitive. Being that most investors that are coming out of the woodwork are purchasing these homes for so low, they can afford to lower the rents on them which has created a more competitive and aggressive rental market. The demand for these homes is higher than it was in the 2004 at a whopping 32.8% and is expected to hit 36% over the next five years in 2015.