Staying Lean: Apartment Owners and Operators Proceed With Caution
The apartment industry marked 2017 with slowing rent growth, a healthy amount of new supply and the leveling of occupancy rates. Data varied across U.S. Census Bureau surveys, but a common thread was a slowing in rental household formation (including single-family rentals). Since its cycle trough of 62.9 percent during the second quarter of 2016, the homeownership rate has crept up ever so slightly and currently stands at 64.3 percent, according to the Housing Vacancy Survey. It’s important to remember that the renter rate of 35.7 percent represents extraordinary growth from the past decade, when 31.9 percent of U.S. households were renters. This equates to 7.7 million new rental households and illustrates continued strong demand among all age cohorts and income levels. In fact, according to the Joint Center for Housing Studies at Harvard University, the greatest increases in the numbers of renters can be attributed to those 65 years and older, and households with income levels above $100,000.