Each year, the Joint Center for Housing Studies publishes a report on rental housing in America. This report provides a comprehensive look at the challenges and opportunities facing the rental market, landlords, and tenants. The COVID-19 pandemic and recession have fueled changes in the rental industry, and the outlook is for growing rental demand and rising affordability challenges in the year to come.
Here are five key highlights from this year’s report:
- Higher-income households are turning to the rental market, fueling competition. Nearly 70% of the growth in renter households is accounted for by high-income households. A surge of higher-income renters into the market has pushed rents up quickly. Asking rents for luxury apartments are up the fastest nationally.
- Nationally, ownership of rental properties continues to shift from individuals to business entities. Investor purchases of single-family homes hit record highs late in 2021. In Virginia, however, investor activity is significantly lower than in many other parts of the country.
- Multifamily apartment construction is on the rise. Fueled by strong renter demand, the number of new apartments being built has increased significantly. Construction of new rental units is increasingly concentrated in large, multifamily buildings. However, single-family rentals still make up a sizeable share of the rental inventory.
- Owners are investing in their properties. Property owners boosted their spending on improvements and maintenance significantly, with much of the new spending going towards remodels, additions, and structural alterations.
- Affordability is an ongoing concern. Despite a strong overall economy, renters have disproportionately felt the impacts of the COVID-19 pandemic and recession. Significant numbers of renters are severely cost burdened, spending more than half of their income each month on housing costs.