Americans are finding homeownership increasingly out of reach, especially for younger families. Unable to purchase a home, they are instead turning to the next closest thing: single-family rentals (SFRs). This strong demographic-driven demand, however, faces a historically low housing supply. With increasing demand and low supply attracting institutional investors to one of the largest asset classes in the world, investments in SFRs are well poised to perform in the future.
THE DEMAND FOR SFRs
Single-family rentals, which combine the benefits of single-family living with the low-maintenance appeal of the multifamily experience, have become the default “starter home” for millions of Americans. As wages fail to keep up with housing price increases, the demand for SFR is forecast to increase, especially among younger adults.
NEARLY 1 IN 5
say they want to rent forever1
63% OF MILLENNIALS
HAVE SAVED $0
for a down payment1
Housing available for rent and sale at
In 80% of
U.S. markets, home prices
rising faster than wages3
Home ownership rates
have trended downward over
past 15 years, with greatest decline in
25-44 AGE GROUP4
SFRs are the fastest growing sector of the U.S. housing market,
GROWING TO 11.7% OF ALL HOUSING UNITS SINCE 20055
Once the driver behind multifamily real estate success, aging Millennials are pushing demand for SFR homes. These renters have higher incomes than the traditional multifamily renters and remain in their home for 3+ years.6
Future Demand for SFR Homes
67 MILLION PEOPLE STRONG
1. RE Journals, Forever renters? Nearly 20 Percent of Millennials not Interested in Owning a Home, February 18, 2021
2. Moody’s Analytics, “Overcoming the Nation’s Daunting Housing Supply Shortage,” March 2021.
3. HousingWire, Home Prices are Rising Faster than Wages in 80% of U.S. Markets, January 10, 2019
4. Joint Center for Housing Studies of Harvard University, The State of the Nation’s Housing, 2018
5. U.S. Census Bureau ACS; John Burns Real Estate Consulting, LLC (Data: 2Q20).
© 2022 Capview Partners. All rights reserved.
The information on this website is for informational purposes only by providing general information on our services and philosophy, and should not be relied upon for any other purpose. The material on this site does not constitute an offer or solicitation to purchase any investment solution or a recommendation to buy or sell a security, nor is it to be construed as investment advice. Capview Partners is not rendering legal, financial, accounting or other professional advice on any matter. Additionally, the material on this site does not constitute a representation that the solutions described therein are suitable or appropriate for any person.