Trends bode well for real estate investors, particularly so if you look at recent housing trends. The Census Bureau recently released the Homeownership Rate as of the second quarter of this year GDP Estimate Revisedand the rate fell yet again this time to 62.9% of the populace. This matches a low not seen since 1965. Lyndon Johnson was President back then and was also the very first year the Census Bureau began tracking such data. Additionally, the United States added almost one million new households this past year and they were all renters. This according to a story reported on abcnews.com.*

 

As the class of Baby Boomers begins to dwindle while the Millennials forge ahead, one can see this trend of homeownership and more renters only increasing. Millennials would rather rent now instead of buy and the average age of a first time homebuyer is now closer to 33 years old, the high end of this so-called millennial group.** If this trend does in fact continue, and there really isn’t any reason not to think so, the rental markets will continue to be strong for the foreseeable future.

Why are first timers waiting so long to buy a home? It could be for various reasons, all valid. Those just coming out of college can be loaded with debt after borrowing to pay for ever increasingly expensive tuition and fees. Millennials are waiting for the right job in the right town and typically the first job won’t last very long before an even better prospect appears. Mortgage lending guidelines also tightened up since 2008, and that’s a good thing by the way, making it more difficult to qualify for and quite frankly some millennials may have paid attention to the economic downturn that began with the housing crisis and might be a bit gun-shy to make such a purchase.

Whatever the reasons, they’re valid ones and the statistics don’t lie. There are more renters and there will continue to be. Real estate investors who now own cash-flowing properties will love this news of higher rents and more available tenants.

 

*Josh Boak, abcnews.com Business, July 28, 2016

 

** Zillow.mediaroom.com/2015-08-17 August 17, 2015

 

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