“These market conditions will likely continue in 2016, as newly built apartments are absorbed by demand from new, young households. Look for rental vacancy rates to remain relatively low and rent growth to outpace inflation in 2016,” Frank Nothaft, chief economist of CoreLogic, said in a recent report.
Looking ahead, with interest rates set to rise, mortgage rates are also expected to rise, which could steer more people toward rentals. Moreover, as rent prices rise, renters may be less likely to save enough for a down payment on a new home. [REIT ETFs May Hold Their Own in Rising Rate Environment]
iShares Residential Real Estate Capped ETF
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Max Chen contributed to this article.