The long-term outlook for the apartment market? It’s a strong one, thanks to the growing number of Millennials who are creating new households and the rising number of older homeowners who are downsizing to renting.
At the same time, a lack of affordable rental units continues to make life difficult for many renters.
That’s the thrust of the 2018 Apartment Statistical Analysis report released in mid-December from RubinBrown.
Why is the outlook for the apartment market so strong? RubinBrown pointed to the number of new households expected to spring up across the country.
Citing data from the Joint Center for Housing Studies at Harvard University, RubinBrown writes that adults under the age of 35 formed 10.5 million new households in 2012 through 2017. That is 1.5 million more than during the previous five-year period. RubinBrown predicts that the Millennial generation will boost household growth for many more years.
The challenge that renters face? Increasing rents. RubinBrown writes that the growing demand for rental units is taking place at the same time that these units are becoming less affordable. Citing the State of the Nation’s Housing 2017 report, RubinBrown says that only 31 percent of renters were able to afford the $1,550 median asking rent for a new apartment in 2017.
This is a significant change. In 1990, 41 percent of renters could afford the $1,046 real median asking rent for new apartment units. It’s getting more difficult for renters to find affodable rental units. The report points to a study by the Hudson Institute saying that 60 percent of the country’s low-cost units had been lost by 2013.