Home Economy Millennials encourages apartment rentals rising, not buying a house

Millennials encourages apartment rentals rising, not buying a house

35

Diana Olick, CNBC

Published 5:49 p.m. ET July 8, 2019

Highlights Stories

  • Demand for apartments in the second quarter of this year has prompted 11% from a year ago.
  • This pushed rents up to an average of 3% nationally to $ 1,390 per month, according to RealPage, a real estate software and analytics company.
  • Despite the increase, a record of 82% of renovators say that letting is more affordable than owning, according to a new survey from Freddie Mac, up from 67% just a year ago.

In the suburban D.C., Chevy Chase, Maryland, there is a huge complex of apartment rent and condominium ascending, and it seems that it cannot happen quickly. The demand for rented apartments in and near cities throughout America is rising dramatically, when most thought it would not. It was expected that the rental demand would decrease as millennium going into their house years.

Average demand in the second quarter of 2019 was 11% since a year ago. This followed, on average, rents up 3% nationally to $ 1,390 per month, according to RealPage, a real estate software and analytics company.

“There is a very strong demand for this year's main leasing season,” according to RealPage's chief economist Greg Willett. “It is solid economic growth that stimulates the formation of new families, and a significant proportion of the housing demand that arises is accompanied by rent. At the same time, the loss of existing traders on house purchase is still limited compared to historical levels. ”

Despite the increase, a record of 82% of renovators say that letting is more affordable than owning, according to a new survey from Freddie Mac, up from 67% just a year ago.

We need a change: t Amazon workers are planning a Prime Day strike

“Affordability remains the key factor in deciding whether to rent or buy a house, and the cost of housing has a significant impact on families of all ages, sizes and locations,” said David Brickman, president. and CEO Freddie Mac. “For many thousands of years Gen Xers, buying a house is not a decision based on housing and housing costs – increased pressure from student loans and the increasing cost of childcare has a significant impact.” T

The highest rental demand is currently in most cities of the nation, with Dallas / Fort Worth, Chicago, Houston, New York and Washington, D.C.

“The charts have seen the metrics we have seen this year,” said Toby Bozzuto, CEO of The Bozzuto Group, which has over a billion dollars of Class A residential construction in the works throughout the North and South East.

Chevy Chase Bozzuto development will offer 530 residential units with 466 apartments, 64 condominiums and over 100,000 square feet of retail and restaurants. It is also connected to a metro railway line, which is the main thing needed by today's residents – millennials and baby boomers are declining.

Changes coming: This is how Instagram is tackling bullying

“I think that thousands of years of age aim to have houses. I think it remains as the American dream, but I call that the dream has been deferred and is deferred because of student loans, the lack of a large amount of equity, and they also enjoy versus fixity, flexibility. Bozzuto said: “This is a generation that enjoys a shared economy, they use Uber instead of their own car, so an apartment addresses their needs, flexibility and aspirations.”

Apartments began to flourish in 2014, and it did not slow down despite concerns that lower mortgage rates would hire people. Many new products are still in existence, creating a risk to developers, particularly as building costs increase and a slow-down economy makes it more difficult to raise rents.

While the construction of apartments is booming, the construction of a single family house does not exist. House builders continue to under-claim in terms of demand, putting the high costs of compliance with land, labor, materials and regulations. A shortage of affordable homes for sale in the last few years has pushed prices into the overheated range.

The shortage began to decline somewhat in the past year, but it seems to be getting worse again. The inventory of houses for sale fell in June annually, the first such fall in 10 months, according to Redfin. This could be due to a sharp decline in mortgage rates due to a large reduction in mortgage rates in late spring.

“The only question is that you still have a low inventory and rates are going to restrict sales, so prices are going up, sales won't be so strong,” said Glenn Kelman, CEO of Redfin, in recent interview on CNBC.

Planning a summer road trip? Gas prices could fall back to $ 3 per gallon

© CNBC is a material partner of TODAY USA who offers financial news and commentary. Its production material is independently of US TODAY.

Autoplay

Show thumbnails

Show Subtitles

SlideNext slide last

Read or Share this story: https://www.usatoday.com/story/money/2019/07/08/millennials-spark-soaring-apartment-rental-demand-not-home-buying/1678422001/

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.