IRVINE, CA-A rapid growth in rental income is a byproduct of fundamental shifts in the housing market, driven by a large increase in affordability of investment properties and rising rents, according to CoreLogic, a provider of residential property information, analytics and services here. The firm’s December MarketPulse report shows that weak wage income and job growth has spurred rental demand, and residential investment is contributing to economic growth in line with post-recession history.
In the report, CoreLogic’s chief economist Mark Fleming and principal economist Sam Khater report that residential investment, which has averaged historically only 5% of GDP, is now contributing 12% of the overall low BDP growth rate. And while it took a full two years to reach this point, residential investment is now providing the post-recession boost it normally does.
Also, CoreLogic’s Aurora Bristor points out in the report that multifamily rents are still floating high, with the single-family rental market more of a draw to foreclosed homeowners who brought their volatile circumstances to market.
In some markets, the employment news is more encouraging than in the country as a whole. For example, as GlobeSt.com previously reported, strong employment gains and fierce competition for single-family homes in Phoenix has fueled demand for rental properties here that will persist well into the new year, according to a fourth-quarter apartment market report by Marcus & Millichap.
*Charts courtesy of CoreLogic.
For the full report, click here.