Nevada, USA — March 19, 2015 — Although many parts of the world, including the US have been experiencing an increase in demand for the homebuilding industry, the same could not be said for the second largest US homebuilder, Lennar, along with a couple other homebuilders.
Now, when their sales pace have been dragging and not many people were purchasing from their display homes for sale unlike before, they are now turning to rentals to speed up their profits.
Sparks, Nevada had now become the home of Lennar’s first ever single-family rental homes community. They have built a pipeline of 20,000 apartments that have exceeded $5.5 billion.
Stuart Miller, Lennar’s Chief Executive Officer, said that they have seen and are still seeing the great improvements and potential of the rental markets with vacancies being low and the rental rates getting higher. He says that it is because of the fact that American families are unable to access the mortgage market making them to consider renting single-family homes because of their inability to purchase a home.
In fact, in 20 years, the U.S. Homeownership rate fell down to its lowest ever by the end of last year, 2014. During this same time, the share for the rental housing vacancy rate dropped to its lowest since 1993. This is all according to the Census Bureau. Because of the fact that millions of homeowners are now losing more properties and potential buyers are unable to afford to buy real estate, the demand has indefinitely shifted to rental housing. Another factor for this is that people are having more trouble to qualify for loans.
Lennar’s decision to offer rental housing is now considered a wise move for the company since more people are now being compelled to stray from the norm and turn to rentals.
Lennar wasn’t the only one who entered the rental housing sphere. The largest builder of luxury homes, Toll Brothers Inc., has now also begun to offer apartment rentals as well as student housing.
Lennar reported that their expected income would be about $115 million and that they are also expecting an increase of value.