Rental households comprise 34% of the housing stock, and are growing at the incredible rate of 1.6 million per year, while owned households are actually declining in number. This is an incredible surge in demand.
In our summary of the U.S. housing market, only 20% of renters live in large buildings (20+ units), and the remaining 80% of renters live in alternative types of housing.
Approximately 55% of new renters are renting single-family homes, while 45% are renting apartments. The single-family rental business, which is already larger than the institutional quality apartment business, is booming. Unprecedented levels of distressed home sales, at home price/rent ratios that are the lowest in decades, is driving the boom.
Eventually, most of these renters will become homeowners. In the meantime, smart real estate investors will take advantage of the temporary disconnect in the market.