The housing market has shown signs of growth over the last few months, and though it remains a long way from full recovery, housing’s vice grip might finally be easing up, according to CoreLogic’s latest MarketPulse report.
In their report, CoreLogic finds that that the housing market is recovering on the strength of investor-based demand for single-family rentals (SFR) along with the decline in the number of under-equited households.
“These are short- to medium-term benefits driving recovery that will likely persist into 2013,” says CoreLogic Chief Economist Mark Fleming.
Drawn to an abundance of low-priced foreclosures, investors have been acquiring a large number of SFR properties despite past hesitation regarding SFR securitization risks.
To quell this past uneasiness, several rating agencies have analyzed various SFR market variables over the last few months to better asses SFR risks, tracking different variables such as supply and demand factors, historical leasing trends, and monthly supplies and rents.
The SFR market remained active during late summer 2012, showing increases in demand, rising rents, and a diminishing supply attributed to a rise in closings. In August, leasings increased 7% from a year ago and were up 12% on a year-to-date-basis, reports CoreLogic.
Over the last two years, monthly stock has seen an addition of 42,000 rentals as volumes were up for every month during the same period. The added figure represents more than twice the average flow the U.S. experienced before the housing recession.
“Housing is typically a sector that leads the economy out of a recession. This time, it has been a significant drag on recovery, though one that is finally fading,” says Fleming.
A full housing recovery, according to CoreLogic, will be driven by a healthier economy, fundamental gains in income growth and consumption, and an ongoing increase in home prices.
Written by Jason Oliva