What does the future of America look like if it becomes a nation of renters?
According to a 2022 Wells Fargo Investment Institute report, “Private Real Estate (a sub-strategy of private real assets) features various strategies with differing risk-return profiles. At this point in the cycle, we are more constructive on Value-add and Opportunistic strategies.”
In other words, like I always say, the money is in multifamily properties.
Look, more than a million people immigrate to the United States every year. More people come to this country every year than in every other country.
When immigrants move to America, they do not buy a house as soon as they get here. Our grandparents and great-grandparents rented a small place; they didn’t buy a big house. For their first year, they mostly rented. After that, they bought a house.
Now, people come to America and rent for their first five years — or longer.
Is the American Dream of home ownership dead?
According to a study by the Pew Research Center, the nation has more renters today than at any time since 1965, when comparable data became available in America.
Although U.S. households grew by 7.6 million between 2006-2016, the number of owners didn’t change due to the housing crisis.
Data shows that most young people under 35 are the biggest group that make up renters in the U.S.
America is indeed becoming a renters nation because of inflation and the high cost of living. Additionally, the ever-increasing demand for rental units is resulting in higher rents.
Overall, the decreasing number of young homebuyers is an indication that America is becoming a nation of renters. The American Dream is no longer owning a home — but simply having a place to live.
The future of America as a renters nation
Another Pew survey shows that 72% of renters would love to buy a home, but they can’t afford it in this economy.
In the past, people have always aspired to own a home. But in this economy, many are forced to rent. On the other hand, a lot of millennials actually prefer to rent an apartment instead of being locked in a mortgage.
Luckily, for real estate investors, this situation is a goldmine.
Now, you can be a landlord for multiple properties. There will be an even higher demand for rentals, and the cash flow opportunities are endless.