Spike in Rental Units Among Millennials, Minorities and Seniors Expected

Photo via rentfaxpro.com

Photo via rentfaxpro.com

Well, it looks like the rental boom in the U.S. is here to stay. According to a report from the Urban Institute and article in the National Real Estate Investor, new renters will outnumber new homeowners over the next 15 years which will cause a “sustained surge of rental housing demand that will significantly affect Millennials, seniors and minorities, and expose important gaps in our current housing policies.”

Millions of new renters and fewer new home owners will drive the percentage of households who own rather than rent down to 61.3 percent by 2030. That’s quite a drop from the 63.6 percent recorded in 2013.

According to the article, homeownership rates will continue to decline as the majority of 22 million new households in the U.S. between 2010 and 2030 move into rental housing. It’s expected that 13 million will rent, while only 9 million will purchase their home. Why the gap? Many of the households will be minorities, which have been more likely to rent historically. The Urban Institute says that in order to reverse the trend, more “initiatives that expand credit availability in the mortgage market” for Hispanics and minorities are needed.

Experts had predicted that rent growth would be around 4 percent for 2015 but are now expecting that number to be in the high 4 percent range for the rest of the year. For 2016, they expect growth in the high 3 percent range.

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