While the American dream of owning a home is still very much alive, it is on the decline as homeownership falls to its lowest level since 1995 and more people are content with renting a home.
Now, a new report from the Wall Street Journal reveals that more single-family homes across the nation are being built exclusively for renters to meet the growing demand.
Last year 5.8% of the 535,000 single-family homes started were built for rental purposes, reports the WSJ. That is up from 4.8% in 2011, and it’s the highest since 1974, according to census data by the National Association of Homebuilders. Overall, nearly 15 million single-family homes were rentals last year, up from 10.8 million in 2005, according to the research firm Zelman & Associates.
Investors are seeing profits and benefits in turning new homes into rentals. One such benefit is that new homes generally cost less to maintain and typically come with builder warranties. The WSJ also points out that the cost of building a new home is relatively low these days.
Investors believe the rental market will continue to see strong demand and rising rents. “While there is little data for the level of single-family home rents, apartment rents have shot up 11.3% since 2009, according to Reis Inc.,” shares the WSJ.
For the full story, read the WSJ article here.