New Report Forecasts That the U.S. Needs 4.3 Million Rental Units by 2035
The Report’s Rental Demand Projections Align with Several of CARROLL’s Verticals
A recent report by NMHC and NAA highlights the future of the U.S. rental market, stating that approximately 4.3 million units will be needed by 2035 to meet rising demand. This equates to building more than 260,000 new apartment homes each year. And while that might be a staggering number, the report points to a future with more renters and supply.
The limited supply seen in today’s market has ties to the 2008 financial crisis that thwarted production and upgrades to existing product. CARROLL has capitalized on its in-house construction team to renovate value-add opportunities as an answer to supply, but the Covid pandemic helped expose supply issues on a larger scale. As an solution, CARROLL relaunched its ground-up development venture in early 2022. With its experience as an owner and operator, the company is well-positioned to build a pipeline that annually delivers thousands of units to the constrained housing market, while also implementing its management solution.
The report attributes nearly 40% of the total projected forecast – 1.5 million new housing units – to the states of Texas, Florida, and California. With operational expertise and regional offices in both Texas and Florida, CARROLL will remain bullish on its investments in new MSAs. Earlier in 2022, the firm entered a new market (Phoenix, Arizona), further solidifying its westward expansion after entering the Las Vegas market in 2021.
From a percentage growth basis, the report shares that Boise, Austin, Las Vegas, Raleigh, and Orlando (“smaller secondary markets”) are expected to grow by an average of more than 2% per year through 2035. This is roughly twice the U.S. average of 1.1% seen last year. Presently, CARROLL has an active presence in 80% of these smaller secondary markets. With the report’s projected housing fundamentals and the firm’s ability to meet market-specific demands via property management, construction, or ground-up development, CARROLL remains optimistic about the future of the U.S. rental market.