Housing Unaffordability Keeps Rental Demand Strong

Darcy Miramontes

Surging single-family home prices in Orange County aren’t slowing down—and they are likely to keep residents in the renter pool for years longer. According to a new report from JLL, the average home price in Orange County is $821,000, producing an average mortgage of $4,242 per month. Even worse, at current income rates, the average resident would need to save for 31 years to afford a down payment. As a result, multifamily vacancy hit 3.4% in Orange County last year, and rental rates increased 2.3%. In 2019, expect even stronger rent growth and more demand as home prices continue to rise.

“There are a lot of economic drivers in Orange County that help drive residents to apartments. One of those is surging single-family home prices,” Darcy Miramontes, EVP at JLL, tells GlobeSt.com. “There is also a big employment base that attracts young professionals and millennials that are not quite established or don’t quite have the income to buy a home. That is also helping to drive multifamily occupancy.” Bob Patterson, SVP at JLL, underscored the impact of single-family housing on multifamily occupancy. “The demographic trends are very favorable and the income trends are favorable, but the cost of housing is so incredibly high that renting is really the only choice for a significant number of Orange County residents,” he says.