Here is some good news for the multifamily building industry: The national rental vacancy rate hit 7.6 percent in 2014, the lowest in nearly 20 years, according to a new report from the Joint Center for Housing Studies at Harvard University.
Released today, the 2015 State of the Nation’s Housing highlights the continuing demand for rental housing, particularly for Generation X and millennials, as these younger households still prefer renting over buying.
It forecasts that among individuals now under age 30, there will be 20 million new households between 2015 and 2025, and while the majority of these newly formed households will move into rental housing, that demand will eventually spill over into homeownership. Minorities are expected to be responsible for 85 percent of the net household growth over the next 20 years.
In the meantime, however, rent burdens are growing: Almost half of renters in 2013 paid more than 30 percent of their income for housing, while a quarter of households were severely burdened, paying more than 50 percent of their income for housing.
The report also details how that as baby boomers move into retirement years, most expect to remain as single-family home owners. The Joint Center notes that by 2025, the growing population of seniors is likely to increase demand for housing that offers “a combination of affordability, accessibility, and supportive services.”
One thing that stays the same: Housing remains key to net worth. “For the typical home owner, home equity remains a key source of household wealth, accounting for $80,000 of the $195,500 median net wealth of home owners in 2013, while the median net wealth of renters was just $5,400,” the report said.