Multifamily Market Expected to See Big Growth
October 31, 2011
The multifamily housing market is expected to see a multi-billion dollar boost as millions of home owners who were foreclosed upon are now forced to rent, according to a new report by Morgan Stanley.
Many of these former home owners will now have to likely pay rent over the next five years as their credit repairs, which would equal $72.7 billion in incremental rental payments instead of mortgage payments, according to Morgan Stanley.
Since 2007, RealtyTrac has reported 8.9 million homes have been lost to foreclosure, with more expected. What’s more, about 7.5 million households are delinquent on their mortgage or in foreclosure, according to Oliver Chang, analyst with Morgan Stanley and lead author of the report.
Foreclosures are expected to chip away at the home ownership rate. Chang expects the home ownership rate to fall in the coming years to 60 percent. Recently, the Census Bureau reported the home ownership rate at 65 percent in the last Census, which is down from its 69 percent peak.
Source: “Morgan Stanley Predicts Foreclosed Home Owners will pay $72B in Rent Annually,” HousingWire (Oct. 28, 2011)
Updated: October 11, 2019