Single-family rental market grows as homeownership declines
The supply of owner-occupied housing in the United States has increased by 10% over the past five years, while rental housing has only increased by 1%. Freddie Mac estimates the housing shortage in the United States at over 275,000 homes.
âThere is just as much housing shortage in the rental market as there is in the home buying market,â said David Howard, executive director of the National Rental Home Council. âThe demand for single-family rental housing is on the rise, in part in response to the Covid pandemic, but also due to strong underlying demographics. “
The change is also attracting homeowners, as renters of single-family homes tend to stay longer and have lower delinquency rates. NexMetro Communities, whose 23 neighborhoods carry the Avilla Homes shingle, have seen tenant retention rates increase by 20% since the start of 2020. For investors and homeowners, properties built for rental are increasingly offering a higher yield, which continues to pay dividends year after year. . “With so many landlords stuck with underperforming tenants, building it for rent offers a higher capitalization rate than developing and selling property,” said Justin Abdilla, a real estate lawyer. “Why slaughter the sheep when you can shear it?” “
Nicolette Boxe, investor and real estate agent in Leesburg, Va., Agrees. After years of buying and renting properties one by one, she is now building a two-story, three-bedroom townhouse community in her hometown of DeRidder, Louisiana. The homes, which are each equipped with an electric carport and a small yard, will rent about $ 2,000 per month. They’ll stand out in DeRidder, she said, and that’s the point.
âWe try to make people feel like an urban city, even in Louisiana, where people are not used to it,â she said.
In the NexMetro communities around Phoenix, Dallas, Denver and Tampa, “residents are primarily tenants by choice,” said Hartmann, the general manager. âThey can afford to buy, but choose to rent because of their stage of life and preferences. For them, it is a piece of lifestyle.
Micaela Cullender, 22, a fraud specialist for Goldman Sachs, chose the Avilla Heritage community in Grand Prairie, Texas, near Dallas, after noise from neighbors in her apartment building became intolerable as she worked from home. She and her fiance, Tate Stavenhagen, were going to buy a house after getting married. After living in Avilla, where they have 10 foot ceilings and quartz countertops, they plan to build a house with amenities comparable to their rental.