A growing demand for rental housing, driven by affordability concerns and changing attitudes toward renting, may be a boon to the multifamily space, according to new data from Freddie Mac.
An increasing number of renters consider renting a more affordable option than purchasing a home, according to Freddie Mac. And data released Wednesday indicates that a growing number of renters are satisfied with their current living situation. The number of renters who believe that renting is more affordable than owning has increased from 68% to 76% this year.
While it may be bad news for single-family homebuilders, the sudden love affair with rental could be a boon to the multifamily market, according to David Brinkman, executive vice president and head of Freddie Mac Multifamily.
“Our rental survey confirms what we’re seeing in the market – that a growing number of individuals across demographic groups view renting as more affordable and better suited to their current economic situation,” Brinkman said. “These changing perceptions, combined with rising rents and tightening supply of affordable housing, are likely to fuel continued multifamily market growth in the years ahead. More importantly, it makes our role – providing financing to meet the nation’s growing workforce housing need – even more important.”
The move toward renting isn’t simply about perceived affordability – perceptions about renting are changing. An increasing number of renters feel that renting is a good choice for them. More than half – 58% – feel that renting “fits (their) current lifestyle,” the survey found.
Renter satisfaction is also relatively high. About 60% of renters said they were satisfied with the overall experience of renting. And while 41% said that affordability was a major driver in their decision to rent, 33% said that buying a home simply wasn’t a priority.