Rental Rates

It is always good for residential loan originators to know the rental situation in their area. If rental rates, or house prices, are going up 5% a year and incomes are only going up 2% a year, well, that is a problem. Until recently, the combination of a shortage of multifamily units, booming demographic demand from Millennials, and an improving economy meant strong demand for apartments. This resulted in strong rental growth and large increases in supply. But, things are reversing. The largest cohort of Millennials is almost 26, job growth is slowing, years of new supply are saturating the market, and now banks are becoming skittish about lending to multifamily developers.

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