The apartment business is depending on strong demographics and stronger demand to keep absorbing the hundreds of thousands of apartments still planned to open this year.
“In 2014, apartment rents grew 4.6 percent despite a fairly good amount of supply,” says K.C. Sanjay, senior economist for data firm Axiometrics. “The reason for this is the job growth, right above 200,000 new jobs a month, and rental household formation.”
That’s sounds like a solid foundation for strong demand for apartments. But a close look at the demographics shows a few odds twists and turns in the data. The growing number of U.S. households turns out to be largely due to an aging population, not young Millennials with new jobs, according to a recent report by the Terner Center for Housing Innovation at the University of California at Berkeley. Also, an unusually low rate of homeownership is driving people to rental housing—but that can’t last forever, reports Axiometrics.
Read entire article here in National Real Estate Investor