NEW YORK, Nov. 9, 2016 /PRNewswire/ -- Operators in the Apartment Rental industry are set to reach new revenue highs over the five years to 2016. Increasing demand and a shortage of available rental units have decreased rental vacancy rates and enabled landlords to raise rents. Therefore, IBISWorld expects industry revenue to increase an annualized 4.9% to $175.2 billion over the five-year period.
For the full report, visit IBISWorld's Apartment Rental in the US industry report page.
The industry was hurt by the recession, but the same economic factors that damaged the industry also forced people out of homeownership. According to IBISWorld Industry Analyst Maksim Soshkin, "lack of work and declining wages made it unaffordable for many to keep their homes or purchase new ones, causing homeownership to fall and renting to increase." The rise in demand and reduction in supply increased the rental vacancy rate, allowing landlords to increase rent prices and boost profit margins.
Over the five years to 2021, industry revenue is forecast to rise. Employment and income levels will increase, enabling some people to afford renting at higher rates. However, improving economic conditions will help others purchase a home, thereby sapping demand for apartments. Still, stringent mortgage lending and increasing interest rates will subdue this threat. "Since most of the industry's future growth will take place in urban areas where homeownership is expensive and low," says Soshkin, "many participants will be insulated from housing market competition."
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