The rental market looks very positive for investors right now, but there are signs that tenants are falling behind.
The rental vacancy rate was 8.3 percent in 2013—the lowest it’s been since 2000, according to “The State of the Nation’s Housing” report by the Joint Center for Housing Studies of Harvard University.
Naturally, rents rose—by 2.8 percent overall, or 3 percent at professionally managed properties with five or more units. It’s probably not too surprising that multifamily loans are up, too, by 13 percent last year. (That increase is actually lower than 2012, when the number of new multifamily loans increased by 36 percent.)
And while new multifamily construction is on the rise, so are rentals of single-family homes. Between 2006 and 2012, the number of single-family rentals increased by 3.2 million. Only about half as many new apartment units were built in that time.
Meanwhile, real median renter costs were up 4 percent between 2011 and 2012, even as median renter incomes declined by 13 percent. Almost half of renters are spending more than 30 percent of their income on housing; about 25 percent are using in excess of 50 percent of their income on a place to live.
The effect is more pronounced for low-income families. About two-thirds of people earning $15,000 annually—about what you’d make on a full-time, minimum-wage income—spent more than 50 percent.Click hereto read the full report from the Joint Center for Housing Studies.
This article was originally published on Community Investor, while the report cited was originally published by the Joint Center for Housing Studies of Harvard University. The Grace Frank Group in no way claims ownership of this knowledge or involvement with these parties.