5 West Group’s Post

With mortgage payments now 35% higher than apartment rents, many Americans are staying in the rental market longer, creating sustained demand for multifamily housing. CBRE projects multifamily rents will grow 3.1% annually over the next five years, outpacing home price appreciation and reinforcing the appeal of renting. For multifamily owners and operators, this trend underscores the importance of strategically positioning assets to capture long-term renter demand. https://lnkd.in/gvQ7da_v

Title: SFR Market Surge: Developers Bet Big on Rental Homes Amid High Home Prices and Mortgage Rates As home prices soar and mortgage rates climb, developers are rapidly expanding the single-family rental (SFR) market, offering new opportunities for real estate investors. Here’s a detailed look at the current trends and projections: Record Construction: In 2023, developers completed 93,000 new single-family homes for rent, a 39% increase from 2022. This surge marks the highest annual total ever recorded, with the trend expected to continue into 2024 before easing by 2025. Diverse Options: These new rental homes range from one-bedroom cottages to five-bedroom houses, including townhomes and detached houses, particularly flourishing in the outer-ring suburbs of fast-growing cities in Arizona, Texas, and Florida. Resilient Demand: Despite a slowdown in rent growth from pandemic peaks, single-family rental occupancy rates remain robust. This sector shows greater resilience compared to multifamily buildings, reflecting sustained demand. Affordability Challenges: With home affordability at its lowest since the 1980s, many Americans, even the relatively affluent, are opting to rent. High home prices, mortgage rates above 7%, and increasing home-related costs are driving this trend. Strategic Developments: Developers like STG Capital Partners and Quinn Residences are capitalizing on this demand by building hundreds of new rental units, often in markets with limited recent large-scale projects. Investment Activity: Major investors remain bullish on the SFR sector. For instance, Heitman’s $235 million partnership with Crescent Communities aims to build new rental homes across the Sunbelt, targeting older millennials and retirees who are priced out of homeownership. Economic Dynamics: Nationally, the median American renter now spends 31% of their income on housing, while rising home sales prices and mortgage costs have outpaced rent increases, with average monthly mortgage payments significantly higher than apartment rents. Market Adjustments: Some areas experiencing a boom in new supply are seeing increased vacancy rates and slower rent growth. However, tenant retention is improving, with more renters renewing leases rather than moving. The SFR market's growth reflects a broader shift in housing preferences and economic realities. As builders and investors navigate this evolving landscape, the focus on creating rental communities that meet demand remains strong. #wsj #sfr #cre

"Renting will be cheaper than owning a home for a long time, according to CBRE. CBRE said that as buying costs soar, rental demand tend to also climb. The average mortgage payment was 38% higher than the average apartment rent at the end of 2023." This is why we are bullish on housing... https://lnkd.in/dNH-hDpU --- My name is Dave Weinstock and I’m the principal and founder of DW Capital. We help working professionals create passive income and build wealth by investing in commercial real estate. Click the “🔔” to follow me for information on real estate and passive investing.

"Renting will be cheaper than owning a home for a long time, according to CBRE. CBRE said that as buying costs soar, rental demand tend to also climb. The average mortgage payment was 38% higher than the average apartment rent at the end of 2023." This is why we are bullish on housing... https://lnkd.in/esHyn6i9 --- My name is Dave Weinstock and I’m the principal and founder of DW Capital. We help working professionals create passive income and build wealth by investing in commercial real estate. Click the “🔔” to follow me for information on real estate and passive investing.

Did you know? As of year-end 2023, average mortgage payments exceed apartment rents by a staggering 38%. This stark contrast underscores the growing disparity between homeownership and rental affordability. Additionally, with a housing shortage estimated at 3.8 million units in the U.S., particularly prevalent in single-family homes and smaller multi-unit dwellings, the cost-to-buy premium remains elevated. Despite regional variations in this premium, certain markets are poised for quicker declines. Looking ahead, average multifamily rents are projected to grow by 2.8% annually over the next five years, further emphasizing the attractiveness of rental properties. In light of these trends, investors in multifamily properties have a prime opportunity to capitalize on the surging demand for rentals, leveraging the affordability advantage of renting over buying. #multifamilyinvesting #RealEstateTrends #cbreinsight #trendingpost #investmentstrategies #realestate #multifamily

Seeing more rental properties built everywhere is a troubling sign…   Rising real estate prices and high interest rates pose significant challenges for first-time homebuyers. The result is a record number of rental properties being built, higher rental prices, and a decreased ability to save for a down payment on a house.   Homeownership isn’t for everyone…but the landlord is now replacing the bank for younger folks, and there is no equity at the end of 15, 20, or 30 years. “Developers are building new houses for rent at an unprecedented rate, aiming to capitalize on the steep home prices and higher mortgage rates that are forcing many Americans to keep renting. In 2023, 93,000 new single-family homes for rent were completed, according to estimates from housing consulting firm John Burns Research and Consulting. That was 39% more rental homes than in 2022, and the most in any year ever. The breakneck pace is poised to continue this year before easing by 2025.” #rentalproperties #firsttimehomebuyers #personalfinance

🚀 Average mortgage payments are currently 38% HIGHER than average apartment rents as of the end of last year. 🏠 Naturally, this has led more U.S. households to continue living in rentals instead of looking to buy. 👉 CBRE's data shows it'll be AT LEAST 5 YEARS until the two expenses become as closely aligned as they were before the steep increase in 2021. 💡 The takeaway? ✅ Keep investing in apartments ➡️ GibsonCapital.co —————————————— 📰 Read the full article: https://lnkd.in/eqEEQQcb

The decision to rent vs buy a home involves more than numbers. There is pride of ownership and the things that go it. #homeownership#homeselling #homebuying#rentvsbuy#homesellers#homebuyers#firsttimebuyer

In the ever-fluctuating landscape of the real estate market, one question looms large for prospective homebuyers: "Do I buy now or wait for interest rates to drop?" It's a dilemma that stems from the inherent unpredictability of interest rates and the desire to secure the best possible deal on a home purchase. As you stand at the crossroads of this decision, let's explore the factors at play and offer some insights to help guide your path forward. #homebuying #interestrates #realestate #market #housingmarket #mortgagerates #buyingahome #timingthemarket #financialplanning #economicfactors #marketuncertainty

According to a new Redfin report, renter households rose by 2.7% in Q3 2024 to 45.6 million—a growth rate nearly 3x that of homeownership. This gain represents 1.18 million new renter households and marks the second fastest uptick since 2015, as sky-high homebuying costs have kept renting a more affordable option. Home sales are also dragging, with only 2.5% of the nation's homes changing hands in the first eight months of 2024, marking the lowest rate in decades. Home prices climbed 6% year-over-year and are up more than 10% since 2022. Redfin senior economist Sheharyar Bokhari: "With home prices at record highs and mortgage rates still elevated, renting is increasingly the only viable option for many young people and families. Building more homes is part of the solution, but we also need to recognize that Gen Z and future generations may not see homeownership as a primary goal, which could keep the rentership rate high for years." #MultifamilyHousing #ApartmentDemand #Rentership Read the full article here: https://lnkd.in/eS3r77M3