As multifamily construction continues to accelerate and the number of single-family homes being rented reaches new heights, some analysts and housing stakeholders have expressed concern that there could be an oversupply of rentals in the near future.
Those concerns are not warranted, according to a report from Moody's Analytics. The firm recently released an analysis saying the current pace of apartment construction will not overmatch household formation. While new households have not been forming at the typical rate for the past few years, that very trend has created pent-up demand.
As that demand is released, the need for rental housing and apartments in particular is going to surge. Even if improving incomes and employment drive some to seek homeownership, it may not be an issue. Some of those owner-occupiers are likely to buy single-family homes that are currently being rented and competing with apartments, so the changes could balance out.
Rental property management professionals and landlords should be prepared for an increase in young renters that may already be beginning. That growth may occur in smaller spikes or as a steady trend, depending on how the economic recovery proceeds.