Why Do Rents Keep Rising?

Sorting the signal from the noise in commercial real estate investing can be difficult. There are dozens of data points to analyze and consensus can be rare. On one hand, you see record multifamily construction and make the logical assumption that vacancy will go up, while rents will go down. Except, it’s not happening that way. It’s true, there is a record supply hitting most markets. But there is also record demand gobbling up that supply.

Who’s driving that demand? Echo Boomers. Millennials are the largest generation in the U.S. They are also in their prime renting years. Record student debt and a tight job market have slowed their entry into the market. Still, millennials are making economic gains and are slowly entering the housing market as renters.

Investments are not guaranteed. They all come with some risk. If you understand the trends driving the success of your investment you are more likely to succeed. This article offers a nice breakdown of the risks in the current housing market.

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