Tag Archives: rental demand

The Demand Insitute: Rental Demand Leads Housing Recovery

According to a newly released report from The Demand Institute, the “worst of the housing crash is over and a recovery has now started.” Research indicates that average home prices will rise “1 percent in the second half of 2012.” However, unlike previous housing recoveries, this one will be lead by buyers of rental properties. Real estate investors—who accounted for 27 percent of all home sales in 2011, according to the National Association of Realtors—are hoping to cash in on the 50 percent of those who say they intend to rent, rather than buy, when moving within the next two years.

The report, titled “The Shifting Nature of U.S. Housing Demand,” indicates that demand for rentals will be lead by those hit hardest by the current recession—young people and immigrants. At the same time, many of those who “left the housing market because they defaulted on loans” will likely remain renters for the next several years while their finances recover.

While housing prices have dropped significantly from 2005 to 2012, strong demand for rentals has led median rental prices to rise by almost 20 percent during the same time period. The Demand Institute predicts that rent prices will continue to climb over the next several years—good news for landlords.

Some key stats from the report:

| May 16, 2012 More