There are many trends that shape the housing and rental markets and many differing opinions and data on how these trends will affect the markets in 2018. Paying attention to new developments and trends that will impact your local rental market is necessary when making decisions on improvements to your rental property and planning your advertising strategy.
Demographics, job availability, population changes, and other factors all affect the market, so do yourself a favor and take the time to educate yourself. You will feel more confident in your decisions.
The trends listed here are general for every market nationwide. Be sure to research trends more specific to your property’s location for more thorough data.
1. Millennials are Dominant
Although most millennials are moving into a new phase of their lives and looking for a home to accommodate a family, a large number will still continue to rent in 2018. Popular offerings that keep millennials renting are high-speed Wi-Fi and pet-friendly accommodations. In addition, this tech-savvy group will prefer services such as online portals for rental payments and reporting maintenance issues. This group is always on the go and appreciates any service that will give them more time to focus on their busy lives.
2. Introducing the “Gen Z’ers”
It’s time to start researching how to attract this new generation of renters. The Gen Z’ers – those born after roughly 1995 – will soon become the largest demographic in the U.S. Always think about how this group receives information when advertising your property. Online videos or virtual tours of a property, communicating options such as text or email, and online rental applications will grab this generation’s attention.
3. Rising Home Prices
If it happens, as predicted by Freddie Mac in their newly released 2018 Forecast, housing prices will enjoy a 5 percent growth in 2018. There is still an ongoing limited housing inventory, but the demand on this inventory will be tamed by an aging population. Freddie Mac forecasts predict total home sales will increase about 2 percent from 2017. This predicted trend could increase the pool of rental applicants by a small amount – it really depends on your local housing market.
4. New Tax Rules
With the new tax legislation just signed into law in late December, those seeking to purchase a home might decide renting is a better option due to limits placed on property tax and mortgage interest deductions. Experts agree that the new tax plan decreases incentives for homeownership and reduces the tax benefits of owning a home.
5. Interest Rates
Years of record-low interest rates will most likely come to an end. The 30-year fixed mortgage rate broke 4 percent last year. According to the director of economic research for Realtor.com, Javier Vivas, rates could hit 5 percent by the end of 2018. Those who were thinking of purchasing a home and are patient enough to wait until the rates go down again may consider renting instead.
Need more assistance? Call the experts today to talk about trends in our local rental market.