Rates of Home Ownership in the United States Likely to Decline
Since the economic downturn, home ownership rates in the United States have fallen dramatically, which was good news for the multifamily real estate investor, as it meant more people needed to rent their homes. Today, rates hover slightly below historic averages, and some investors fear that home ownership will rise.
On the contrary, home ownership rates are more likely to continue their decline. Millennials continue to lag economically behind all previous generations in the United States, and will not begin to purchase homes until they have caught up in the employment market. Millennials will then need to work long enough to save for a down payment and build credit that will qualify them for a mortgage. In other words, the largest generation in the history of the United States will continue to be a generation of renters for some time.
Investors need to keep in mind that the national trends in the real estate market do not necessarily reflect local ones. In order to be successful, multifamily real estate investors must keep a finger on the pulse of the local market and the changes that it seems likely to undergo.