Single Family Rentals are on the rise
Table is based on the percentage of searches within each category in TREND
Investors make up roughly 20% of home sales. Rather than flipping the purchased properties, many investors are renting them out, causing a boom of single family rental homes. As a sign of this increase, property management companies that specialize in these single family rentals are taking root and filling a growing need to help off-set the investors’ costs for evictions and unplanned vacancies1
In 2010 and 2011, we saw a gain in rental searches and a slight drop in residential searches in the MLS. As you can see from the table, the trend appears to have reversed so far this year.
Student loan debt fosters a rental generation
Armed with unprecedented student loan debt, young adults in the millennial generation, ages 19-34, are moving back home with their parents or renting. Known as the rental generation, Millennials who want to buy, often don’t meet the high qualifications for mortgage approval2
. And it appears this trend will continue as parents, who lost income during the recession, now have less to invest in their child’s education, creating a need for more student loans3
Could the new mortgage score reverse the trend?
FICO and CoreLogic combined data to create a new type of credit score that might make it easier to determine a good mortgage candidate. The new score, called a CoreScore, looks at rental history, short term lending and even property records to add information to the typical credit score, broadening the base of potential mortgage candidates. So if the average FICO score for successful mortgages is 720, more people will reach that 720 number thanks to the added information in this new score. The CoreScore has the potential to help Millenials who offer little traditional credit history for banks to consider4
. Read more about this new score here
What have you seen in your local market? Are rentals on the rise in your area?
Emily Schaffer • Communications Writer / Coordinator
Emily joined TREND in March 2012 as a Communications Writer and Coordinator for the Design
and Communications Department. She is responsible for creating news stories and preparing the monthly TRENDLink. Learn more about our editorial contributors...