Despite the economic recovery, demand for single-family housing is declining while the need for rental apartments is rising, according to speakers at an Urban Land Institute conference in Washington.
"Demand for housing in this country is falling, despite the overall recovery, despite 30-year fixed mortgage rates less than 5%, despite growing confidence among some consumers and a rising stock market," said Anirban Basu, chairman and chief executive of the Sage Policy Group.
"Renting has become fashionable," he said. "That is a real sea-change in America."
The CEO of the Baltimore economic and policy consulting firm went on to say that housing starts and new home sales are at historically low levels.
"There is no momentum," Basu said. "The home building community is in shock. Not by the decline, but by the lack of recovery."
Bill Maher, director of North American Investment Strategy for LaSalle Investment Management, said there is "very good demand" for apartments.
Multifamily vacancy rates fell last year and owners have been able to raise rents.
"It is one [commercial] property type where there is pricing power in many markets including" Washington, Maher said. The apartment market in Washington is "great," he added.