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Drop in Homeownership Rates Strengthens Renter Pool

October 27, 2016

In life, we refer to a confluence of favorable conditions as a “perfect storm” and we wait with baited breath


for one to shine in our favor. Many conditions favorable to buy-and-hold investors have currently aligned in the real estate market and are signaling that now is a great time to purchase single-family rentals.

“The Urban Institute has projected that renter households will grow from 40.7 million in 2010 to 47.9 million in 2020 and 53.7 million in 2030.” Below, we detail the reasons behind the rise in rentership and how you can capitalize on this growing trend.

Why Homeownership Rates Are Tumbling
  1. More stringent credit terms for potential homeowners – Big bank lenders continue to shy away from riskier borrowers, according to CNBC.

  2. Increasing home prices – Home prices continue to climb, making it difficult for many to purchase a home.

  3. Growing inability to save for a down payment – With large amounts of income going to rent and other expenses, many can’t afford to save enough for a down payment.

  4. Changing lifestyle preferences – The two largest potential home owner segments, Baby Boomers and Millennials, are showing less interest in being homeowners.

Tumbling Homeownership Rates Provide Investment Opportunities

Recall our “perfect storm” analogy. While there have been major swings in home prices over the years, they’re currently in recovery mode (and even projected to trend upwards, according to Freddie Mac). You can capitalize on the existing favorable conditions by investing now, before prices climb too high. Remember, there’s a strong pool of renters and every renter needs a property!

Interested in starting your Real Estate Retirement Plan? Get started today by contacting us for a free consultation. 


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