The nationwide thirst for apartments is showing no signs of slowing. In fact, experts predict that nearly 5M new units will be required by 2030.
Elevated Demand for Apts. Expected to Remain Due to Household Formation and Lack of Affordable Housing Options
Separate studies issued this week share the same conclusion that demand for rental apartments and other housing options will stay at elevated levels largely due to continued robust household formation and limited affordable housing options, especially for detached single-family houses.
Reporting on multiple studies just released that show continuing strong demand for apartments, CoStar author Randyl Drummer says that means “demand for rental apartments and other housing options will stay at elevated levels largely due to continued robust household formation and limited affordable housing options, especially for detached single-family houses”.
Study Done By Hoyt Advisory Services
In addition to noting the need for 4.7M new units, the commissioned by the National Apartment Association (NAA) and National Multifamily Housing Council (NMHC) finds that:
…developers will need to add at least 325,000 new apartment units every year to the nation’s stock to meet demand, far above the average 244,000 units delivered annually from 2012 to 2016.
The Hoyt study also found “…39 million Americans now living in apartments, the industry has quickly exceeded capacity, with a record average of 1 million new renter households formed annually over the last four years”.
Study Done By Joint Center for Housing Studies at Harvard University
The Harvard study focused more on “…the increasing lack of affordable housing due to the limited stock of available single-family housing and rising apartment rents amid an extremely tight pipeline for both for-sale and rental housing”, according to Drummer.
In terms of affordability, the study noted that:
…nearly 19 million U.S. households paid more than half of their net incomes to cover housing expenses in 2015.
And, as to the supply of housing, the Harvard Team found:
Even after seven consecutive years of growth in new residential property supply, the U.S. has added less new housing over the past decade than at any 10-year period dating back to at least the 1970s. The rebound has been particularly weak in single-family construction just as the national homeownership rate has begun to level off after years of decline.
Changing Times
It looks like the demand for apartments won’t be slowing anytime soon. So how can you benefit? It takes a simple call to the multifamily professionals at Pacwest Commercial Real Estate. Visit eugene-commercial.com or give René and her team a call at (541) 912-6583.
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