Rental Markets: A Sign of Strength
Freddie Mac (OTC:FMCC) released yesterday its U.S. Economic and
Housing Market Outlook for June showing that rental market activity
has been a bright spot for the housing market, and due to rental
demand by those postponing homeownership, further increases are
expected in the coming year.
Outlook Highlights
- Over the year ending March 2012, an additional 1.5 million
households moved into rental housing, a 4 percent increase in a
single year.
- Rental vacancy rates have dropped roughly 2 percentage
points over the past two years.
- While nominal rents rose (2 to 4 percent) during the year
ending March 2012, average rent on an inflation-adjusted basis
remained below where it had been for much of the decade prior to
the Great Recession.
- Multifamily property values are up on average about 25
percent during the past two years from their trough during the
first quarter of 2010, according to the National Council of Real
Estate Investment Fiduciaries index, but still about 14 percent
below their peak prior to the Great Recession.
- Starts of buildings with at least five apartments have
jumped 48 percent in the first five months of this year when
compared to the same period a year ago.
View the
video overview and download the complete
June 2012 U.S. Economic and Housing Market Outlook. Freddie Mac
compiles data on major economic and housing and mortgage market
indicators and offers forecasts based on those indicators.
Quotes
Attributed to Frank Nothaft, Freddie Mac, vice president and
chief economist.
- "Further increases in rental demand are likely in the coming
year as newly formed households postpone homeownership decisions
until the economy strengthens and they have accumulated
sufficient savings. Overall apartment market trends may show
further vacancy declines and rent gains, with property values
improving as well."
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