The Pew Charitable Trusts estimates that around 43 million American households rent their homes instead of buying them, either for convenience, cost, or a combination of the two. The Americans` option to rent instead to buy varies largely on several variables, such as their family`s income, lifestyle, and the real estate market area.
The increase in the number of Americans who prefer to rent rather than own their homes has created opportunities for investors in one- to four-unit rental properties, mixed-use complexes, and multifamily structures. This is an ideal chance for commercial mortgage brokers to expand their market by responding to this trend and providing financing programs for residential rental properties such as single-family houses, condos, townhomes, and small apartment complexes.
America claims that the rental property business has been booming over the past ten years. Records show estimates from the Census Bureau, the number of single-family rental homes increased in the U.S. by 31% in the decade immediately after the housing crisis of 2007, while the number of multifamily rental homes only increased by 14%.
The rental property market, specifically the urban regions have greatly influenced by the millennial outlook. According to United States population estimates, the U.S. Census Bureau, millennials will exceed baby boomers in 2019 as the largest generation of living adults in the country when their numbers reach 73 million and the Boomer population goes down to 72 million. Even still, in terms of homeownership, millennials aren’t imitating their parents.
The fact that renting is more economical on a monthly basis than owning was given as the primary reason for millennials’ preference for rental housing.
Boomers and millennials live relatively different lifestyles than one another, especially when it comes to where they choose to reside and why they prefer to rent rather than own a property. By the time they were 34 years old, around 52% of baby boomers in 1974 had their own house. This percentage was only 29% among millennials in 2016. So, despite the notion that millennials are purchasing more houses than ever, according to a new Ellie Mae analysis, the majority of millennials endure to live in rentals, and data indicates that this trend is unlikely to alter very soon.
To respond to the decline in home-purchase loans and refinancing businesses influenced by the recent increase in interest rates, commercial mortgage brokers have been able to capitalize on the improved demand for rental assets by providing investment and small-balance commercial mortgages to borrowers interested in purchasing rental properties.
Millennials, labeled as the “Generation of renters,” comprise the largest generational group in the U.S. Their renting preference has significantly influenced the rental business industry and positively modified the landscape in the rental market.