Despite one of the best buyer’s market in years, Americans are choosing to rent.
According to MPF research, a Texas firm that analyzes the apartment industry, the rental business is booming. Occupied apartments increased by 215,000 in major U.S. markets in the first half of 2010, the largest increase the firm has reported since it started tracking apartments in 1992. Moreover, the rate of vacancy fell to 6.6% in June, down from 8.2% in December.
While high instances of foreclosures would lead to a surge in the rental market, many industry experts suggest that the decision to rent is a conscious, if sometimes reluctant choice. Americans are motivated to rent due to the mercurial job market, not necessarily a lack of financing.
“Uncertainty regarding job security has led to an increasing number of individuals preferring the flexibility of renting,” James Korman, who runs rental agency Korman Residential Properties, explains. “Renters can chase career opportunities anywhere they arise without having to sell their existing home prior to seizing an opportunity.”
In fact, economists attributed the recent rental upswing reported by MPF to the improving job market for young adults. According to Bloomberg.com, employment for 20- to 29-year-olds rose in May and June on a year-over-year basis for the first time since the end of 2007. This demographic isn’t likely to buy because they aren’t ready to settle down.
As Utah resident Autumn Buys tells MainStreet, “I am 22, and would rather be having my rent each month go toward a house rather than toward nothing, but in my transient situation, heightened by a volatile economy, it just isn't an option.”