Why Real Estate Investors are Vital to the Housing Market
Several years ago as we entered our relationship with our lobbyists and political advisors I was forced to truly evaluate our industry in the light of “big” politics and the “hot” issues that surround real estate. It was then that I realized
how important we are to the nation’s economy and the population in general. Real estate investors, not large apartment owners, not real estate investment trusts, not HUD based projects, are the backbone of our nation’s housing. Our mem-
Consider the following facts and you will understand just how vital the participation of real estate investors are to the housing industry and the economy as a whole:
Rental housing is a necessary component of housing choice and is preferred by more and more people everyday. • Renting had a long stagnation during the time leading up to the housing crisis. As credit was easily available many who would generally be in the pool of renters went the route of homeownership. However, since that time, there has been a surge in the share of rental households. • According to Harvard’s Joint Center for Housing Studies (JCHS), the number of renters fell in both 2017 and 2018. Growth resumed again in the first three quarters of 2019, but only at a modest annual rate of 350k households—far short of the
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annual increases averaged during the rental boom in 2004–2016. As of 2021 there were approximately 43.6 million renters in the U.S. • Breaking those JCHS numbers down by age we find the median age of renter households has been on the rise. The share of renter households age 55 and over increased from 22% in 2004 when homeownership rates peaked to 30% in 2018, lifting the median renter age from 39 to 42. Although the median age of homeowners also rose over this period, the median renter was still 15 years younger than the median owner.
REAL ESTATE OPPORTUNITIES IN INVESTING
In 2018, more than one in three renter households was headed by a person under age 35, compared with just one in ten homeowner households. In 2018, about a third of the nation’s 47.2 million rental units were single-family homes. • Most new immigrants lack the capital required for sustaining the demands of homeownership and will remain renters for ten or so years before they can afford to become homeowners. • The more than 77 million Baby Boomers are now over 65 and now downsizing often choosing the convenience of renting.
