The U.S. apartment market has shifted significantly in the past decade. Apartment prices are on the rise and getting hot for this spring and summer. Sales are mirroring the economy and increasing demand from millennials. Keep reading to find out what to expect for the apartment market in the months to come.
Inventory is Rising
As you may already know, the U.S. economy is booming, and sales are rapidly increasing. Therefore, the housing market is a direct reflection of what is going on in the marketplace. Healthy growth has been reported in the apartment market, resulting in higher demand. The next section will explain how and why sales are mirroring the economy.
How Sales are Mirroring the Economy
There is a direct correlation in how the U.S. apartment market ties to the economy’s health and activity. When the economy is slow, the money supply is restricted, and there are fewer buyers. In conclusion, the greater the supply is, the higher the demand is. If we continue to see the economy booming, the sales in the U.S. apartment market will remain increasing.
Demand for Millennials
According to Forbes, “Millennials will continue to make up the largest segment of buyers in the U.S. apartment market.” Despite the markets rising rates, millennials are still purchasing homes and surging millennial demand. As a result, 2020 is expected to reach the peak of the U.S. apartment market sales.
Apartment searches and sales follow a seasonal trend in which we refer to as, seasonality. Summer months are typically the highest for sales, and the fall and winter are usually when rent growth is at its lowest. Seasonality does not just impact the rent growth but also influences the daily factors for property managers.
Steady Growth in the Future
NAA’s 2018 Income and Expenses Survey revealed, rent revenue collected as a percentage of potential gross revenue, has reached its highest level. The annual pace of the U.S. apartment rent growth has significantly accelerated. As this rate, we can expect to see momentum in the apartment market’s performance.