Homeownership Trends Having Little Effect on Multifamily Investment
Just because more people are buying homes, that doesn’t have to hurt the outlook for investment in rental apartments, according to housing economists.
The percentage of people who own their own homes rose sharply in the second and third quarters of 2020, according to U.S. Census data. Usually such a spike would mean millions of renters had moved out of their apartments and bought homes of their own. And for much of 2020, there were many anecdotal stories of Americans relocating during the pandemic from urban apartments to suburbs or less expensive secondary and tertiary urban markets.
If the long-term balance changes between the demand for rental housing and for-sale housing, that could have a huge effect on how many investors are drawn to put their money into multifamily—and how much their investments yield.
But for now, apartment pros are confident that demand for apartments will stay strong—and developers will be unlikely to build enough to fill the need. “That basic dynamic is unlikely to change,” says John Sebree, senior vice president and national director of Marcus & Millichap's Multi Housing Division