Huge Supply Of New Apartments Will Be Filled By People Who Are Forming Households Later Than Usual
Developers have been busy over the last few years building an abundance of apartments, which has led to a rise in vacancies. But a shift in household formation will help fill the new supply.
People had been waiting until they were older to move out on their own following the Great Recession, but they're starting to move out en masse now. That’s a good thing considering developers are expected to continue building new apartments over the next two years. They began construction on 395,000 new apartments in 2015, far more than the 331,000 per year that’s considered normal, National Real Estate Investor reports.
Between 2008 and 2014 the recession pushed new household formations down by over 5 million—now many of those people are financially comfortable enough to rent on their own. [NREI]