The conversion of owner-occupied single-family homes into renter-occupied homes has played in important role in stabilizing housing markets that has been wracked by foreclosures, according to a report on rental housing released Tuesday morning.
The Joint Center for Housing Studies of Harvard University (JCHS) report showed that 1.4 million single-family homes became occupied by tenants during the 2008-2009 period, up from 700,000 in the 2006-2007 period.
"That is a tremendous surge in rental housing supply," JCHS research director Christopher Herbert said during a Washington presentation of the report's findings.
This surge in demand has kept single-family vacancy rates fairly stable over those four years, he noted.
The conversion from owner-occupied to renter-occupied data comes from the American Housing Survey (AHS) that is published every two years.
JCHS managing director Eric Belsky told National Mortgage News that he expects the next AHS report will show a continuing surge in conversions in 2010.
Belsky noted attitudes toward homeownership have eroded during the past few years.
"With the way that credit markets have evolved, it is going to constrain people's ability to become homeowners even if they have the will. Many of them are not going to have the way," he said at the Washington event.
The report also shows multifamily rental markets are already beginning to tighten and rents are starting to rise.
"This is going to put pressure in the existing supply of rental housing," Belsky said, which is going to present affordability issues for lower- and moderate-income families.
The report called America's Rental Housing: Meeting Challenges, Building on Opportunities acknowledges that the government now has limited resources to provide subsidies and tax breaks for multifamily housing.
However, Fannie Mae, Freddie Mac and Federal Housing Administration (FHA) have become the most important source of multifamily financing since 2008.
If the GSEs and FHA are downsized, it could raise the cost of multifamily financing and have "significant repercussions for the affordability of rental housing," Herbert said.