The Urban Institute is a Washington D.C.-based think tank that carries out economic and social policy research – according to them single-family rentals both detached homes or townhomes — are developing faster in the Phoenix area than any other portion of the housing market. These rentals outpace both single-family home purchases and apartment-style living.
Sara Strochak, a research assistant with the institute stated “Almost all the housing demand in recent years has been filled by rental units,” She also added that single-family rentals have gone up 30% within the last three years.
If you are thinking about buying investment property in the Phoenix area now would be a good time to buy a townhomes or a single-family home to rent out. This change is unique to newer generations. But when did rentals become so popular? And why are people more inclined to rent than to buy?
When did the rise in single-family rentals start? The housing bubble and the recession – a lot of people got caught in the fallout with foreclosures and underwater homes. A majority of these homes are back to traditional levels and housing values have recovered for the most part in Phoenix – however one thing hasn’t recovered and that is Americans’ unquestioned desire to own a home.
Today, single-family rental homes and townhomes make up 35% of the country’s 44 million rental units, compared to 31% in 2006.
Millennials are leading the way to single-family rentals with many factors contributing to this trend. Many young adults aren’t in a hurry to lay down roots, whether they’re prone to traveling or simply aren’t ready to commit to one area or one home. Student loans and stagnant incomes can also make it harder to save up for a down payment. And it’s inevitable that young people who came of age during the housing bubble would be reluctant to commit to a 30-year mortgage. Up until this point they have wanted to rent rather than own. In some areas of the country the millennials are starting to dip their toe into the home market.
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