Moreover, more Americans have moved away from suburbs toward denser cities, which has made it difficult for builders to keep up with demand.
“And our choice right now is to continue to target those areas that are more land constrained, so it’s harder to bring things to market,” Kaminski added.
Along with the diminished desire for renters to turn into new homeowners, the residential REITs sector could continue to find support from renters as many face rising rents that could keep them from becoming buyers, especially if wages remain stagnant.
Rents in 2016 are expected to rise 3.3%, or down from last year’s 3.6% growth rate, Forbes reports.
iShares Residential Real Estate Capped ETF