Tony Rossi, president of Chicago-based RMK Management Corp. and M&R Development, said renting will be a popular choice for investors until employment numbers show significant improvement. “People are still recovering from the recession and many won’t feel secure buying until they have more confidence in the job market,” he said in a written statement. “For them, the flexibility of renting still outweighs any financial benefits of buying.”
Tinley Park, Ill.-based MACK Cos. also is predicting that the single-family rental market will be a favorite among investors in 2013. “As mortgage rates remain low and rental rates continue to climb, the market will continue to reward investors with outstanding returns in single-family rental homes,” said Jim McClelland, president of MACK Cos.
Right now, the housing recovery is being driven by cash-buyers and investors in most markets and Capital Economics forecasts little signs that “investor appetite is abating.” However, investors will eventually not be able to afford the high prices that they are creating in the marketplace, which could create a problem for the industry if lenders still have strict underwriting guidelines.
“All in all, if the economy continues growing, it’s reasonable to expect lenders to loosen the reigns somewhat,” Diggle said. “The upshot is that mortgage-dependent buyers will gradually play an increasing role in the housing market recovery.”