Buyers unable to afford home purchases are flocking to the rental market to instead find apartments in the neighborhoods where they want to live, but many are finding similar competition and price hikes in a heated multifamily sector, John Burns Real Estate Consulting reports. Investors are being met with fierce competition in nearly every regional market across the U.S., and many are now turning to new development for better yields, according to Jay Parsons, Vice President at RealPage.
Over 700,000 apartment units are under construction, marking the highest level of multifamily development in 40 years. As long as demand remains high, the rental market is expected to thrive for the foreseeable future thanks to favorable demographics and a shifting economy.
- Demand is returning to city centers—but more from a return of city life than a return to offices.
- The demand increase in city centers does not come at the cost of suburban demand. Demand is more governed by life stage and preference-based decisions and urban renters want to live in cities.
- The future is always hard to predict. However, Jay expects there is still room for the apartment market to grow and thrive largely due to favorable demographics over the next 10 to 20 years.