The eclectic line up of Republican presidential hopefuls and its colorful front-runner have made the Republican debates must-see TV. The debate, of course, took place in California, but it was exciting all the same to be in Washington, D.C. on the evening it was televised.
Thanks to the National Multi Housing Council, we were able to watch the debate on the big screen(s) with colleagues during dessert and hear from an excellent line up of speakers and topics before our luncheon on Capitol Hill. When the Fall board meeting kicked off, the Senate had just passed a bill capping the compensation of Fannie and Freddie executives. And the Federal Reserve’s policy-making committee was engaged in a two-day meeting that resulted in keeping interest rates near zero. Many in the apartment sector think the U.S. needs a new tax code, that we have an affordable housing crisis, and that immigration reform is required to alleviate the shortage of construction workers. It’s hard to get much done in Washington these days.
Certainly no housing reform related to the GSEs should be expected until after the presidential election. But multifamily continues to thrive. As NMHC Senior Vice President, Research and Chief Economist Mark Obrinsky stated during the “Apartment Strategies Update” opening session, the next 12 months will look a lot like the last 12 months in terms of the economy (not politics). Obrinsky’s forecast? “There’s nothing that’s likely to break us out of our current growth rate.” Many young adults ages 18-34 are still living at home, but the number is not increasing anymore, so most will transition to rentals.
According to Kim Betancourt, director, economics and multifamily market research at Fannie Mae, 70 percent of Millennials are already planning to buy a home some day, while 37 percent of Millennials are likely to rent apartments; however, many would prefer to rent single family homes. “Millennials now outnumber Baby Boomers,” Betancourt added. “But there are so many of them it doesn’t matter what they do. There’s plenty of business for all of us.”