Magazine article Mortgage Banking

Sizing the Single-Family Rental Market

Magazine article Mortgage Banking

Sizing the Single-Family Rental Market

Article excerpt

Once seen as mostly a mom-and-pop sector, single-family rental properties now house one in eight single-family households, with no decrease in sight.

"A very significant part of U.S. housing is in this market," said Jamie Woodwell, Mortgage Bankers Association (MBA) vice president of commercial and multifamily research, speaking at MBA's Single-Family Rental Finance Summit in April. "There are more households living in single-family rental units than in 10-plus-unit multifamily properties."

Wally Charnoff, managing director with RentRange LLC, Westminster, Colorado, said many families who occupy single-family rental properties "got a taste for single-family living" during the housing boom. "They had backyards, toys and kids in the school system, and now they don't want to go back to a multifamily dwelling," he said.

Tenant renewal rates in single-family rental properties exceed forecasts, said Rick Sharga, executive vice president with Auction.com, Irvine, California. "The notion was that people would rent for a year, but then they decided that they like where they live and they want to stay there," he said.

And single-family rental opportunities will likely grow "because we're finally seeing household formation growth that's been delayed for the last few years because 'Junior' was still living in his mom's basement," Sharga said. As the employment picture improves, these 20-some-things can now start to form their own households rather than living with their parents, he said.

But not all markets show equal growth potential, panelists at MBA's conference said. …

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