Rental income is on the rise with no signs of looking back anytime soon. According to a recent report from the U.S. Census Bureau, rents hit record highs in the second quarter of 2013. At the very same time, home ownership hit levels not seen in nearly two decades, falling to 65.2 percent. What’s causing this trend?

rental income increasing

There may be several factors at play here but the main culprit just may be how much more difficult it is to qualify for a home loan than it was back in 2004 when home ownership hit a record in 2004 when nearly 70 percent of citizens owned their own homes. Leading up to 2004, a new cadre of mortgage programs hit the market that allowed more people to qualify for a home loan, often with poor credit, no down payment or income documentation.

There’s no need to belabor what happened afterwards but the fact is the lending guidelines today are more stringent than just a few years ago. And that’s a good thing. Lenders want to make loans to people they think will pay them back and not go through a costly foreclosure process.

As well, potential home owners may just have decided to wait it out after having seen their friends and neighbors buy real estate at the wrong time at the wrong price.

With more renters, there’s more demand and this demand is pushing up rental rates that have landlords smiling all the way to the bank. Every month when the rent checks roll in. But will this continue?

There are signs of economic growth but none that will really knock your socks off. It’s tepid at best with non-farm payroll numbers still below 200,000, too low to spur any significant economic activity. That indicates that the current trend of home ownership will continue to stagnate and those who cannot or will not obtain a mortgage to buy a house will increase rental demand. They need a place to live and if they’re not buying, they’re renting. Will they rent from you?