The single family residential rental market, enjoying an unprecedented boom for more than a year, could soon be challenged by a less expansive economy next year.
So says an exhaustive exploration of the industry recently published by Multi-Housing News, which notes “storm clouds are gathering, brought on by the dimming economic prospects.”
In forecasting the dynamics of the industry’s particular market, the publication predicts that many capital providers will “turn cautious and take a wait-and-see stance until there is more clarity surrounding inflation, interest rates, and asset pricing.”
The challenges come as the industry itself has seen the growth of institutional landlords, thought to make up around 350,000 units nationally. Such large real estate corporations, asserts Investor’s Business Daily, have in recent years become players in a “landscape where rental homes were traditionally owned by individuals or small businesses.”
The largest number of such units are based in the states of the Sunbelt, according to a U.S. House Financial Services Oversight & Investigations committee report released this summer.
As a reflection of current market dynamics, single-family home rental prices, meanwhile, have seen an average increase of $520 per month. That means, according to the website Dwellsy, that the average $1,800 rent for such property in the fall of 2021 is now up to $2,320.
A Washington response to such ongoing trends is seen with the introduction of a bill called the “Stop Wall Street Landlords Act,” which is designed to deny certain tax and other benefits to companies earning more than $100 million a year in revenue through their single-family housing investments.
“The financialization of the housing market by Wall Street exacerbates corporate profiteering and anti-competitive practices that makes it harder for Americans to afford housing or access homeownership,” California Representative Ro Khanna, one of the sponsors of the bill, said in a statement.
That legislation is currently being reviewed by the House Committee on Ways and Means.
By Garry Boulard
