Los Angeles (AP) — Homebuilders and other real estate companies are dissatisfied with the shortage of homes for sale and become dissatisfied with the price runaway by renting part of the American Dream. I’m betting more.
While individual homeowners and mom and pop investors still make up the majority of single-family rental homes, homebuilders have stepped up the construction of new homes for rent this year.
In the third quarter, builders began construction of 16,000 single-family homes to be rented. According to an analysis of US Census data by the National Association of Home Builders, this is the highest quarterly total for rental housing start at least dating back to 1990.
Industry group analysis includes only housing that builders plan to rent from hanging. This does not include housing built for sale to real estate investment trusts or investors planning to rent real estate.
While these rentals make up only 5.4% of all single-family homes launched in the third quarter, builders are doubling the rental housing model, with investors and corporate landlords enthusiastically buying rental homes. Some are already aiming to increase it. Take advantage of potential homeowners who continue to struggle to find affordable properties.
Ariwolf, Chief Economist at Zonda Economics, a tracker in the real estate industry, said: “The type of rental space serves as an entry-level home in a market where there are few new homes at a reasonable price.”
Soaring home prices and fierce competition for a relatively small number of affordable homes for sale are pushing the limits of affordability for many buyers. According to the National Association of Real Estate Agents, the median previously occupied US homes jumped to $ 353,900 in October, up 13.1% year-on-year. Homes are sold within a few days of being put up for sale.
But these trends are good news for landlords. Rents in US single-family homes rose 10.2% year-on-year in September, according to real estate information firm Corelogic. The company excludes apartments from single-family home rental data, but includes condominium and town home rentals.
CoreLogic expects rents to continue to rise, at least until the end of the year, due to strong demand, shortages in rental housing and a stronger employment market.
Recent quarterly earnings from the country’s two largest single-family home owners highlight a good outlook.
Both Invitation Homes and American Homes 4 Rent reported good results in the third quarter, boosted by rising rents and near-record high occupancy rates.
BTIG analyst James Sullivan has repeatedly evaluated “purchases” for both real estate investment trusts (REITs), increasing labor and material costs that are slowing supply chain challenges and homebuilders’ construction pace. The trend of the housing market is still “very advantageous for renting a detached house”.
According to the Department of Commerce, new homes in the United States were being built at an annually adjusted rate of 1.52 million units as of October. This is an increase of 0.4% from the previous year’s rate. However, the start of single-family homes decreased by 3.9% from September to October, down more than 10% from last year.
The number of rental housing occupancy remains low compared to new home sales. According to NAHB, builders have cultivated 47,000 rental homes in the last four quarters, up 17.5% year-on-year. At the same time, builders began construction of 1.14 million detached homes.
Some of the country’s largest homebuilders are trying to harness the demand for rental housing.
Some sell their homes to investors and businesses looking to buy a community that is already crowded with tenants. In July, PulteGroup announced an agreement to build approximately 7,500 homes over the next five years and sell them to Invitation Homes.
DR Horton has built an apartment and single-family rental housing community. This month, the company’s leasing business estimates that it will generate more than $ 700 million in revenue from the sale of rental properties during the year. Houghton also said he expects to increase investment in the rental business by more than $ 1 billion over the same period.
This spring, Renner will form a venture with several institutional investors, spending over $ 4 billion to buy and rent new homes and town homes from homebuilders and possibly other builders. I am aiming for.
“It really evolved over time, but the star of today’s real estate show is rental space,” Wolf said.
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Housing Market Trends Drive Single-House Rental Growth | WGN Radio 720
Source link Housing Market Trends Drive Single-House Rental Growth | WGN Radio 720