As the housing market has fitfully struggled through a decade-long recovery, homeownership rates fell to a 40-year low, and have not yet recovered to their historical level of 64 percent. Unsurprisingly, the number of renters has soared to an all-time high during this period of time.

The inventory of single family rental homes has increased from a little over 11 million units in 2009 to nearly 16 million last year. And the reported number of housing permits and starts has been inflated by an almost unprecedented amount of multifamily construction.

Even with this rapid increase in apartments, supply has lagged behind demand across the country, driving monthly rental rates higher and higher. And this enormous demand — and lucrative rental income — has led to a boom in multifamily property prices. Some industry analysts have suggested, in fact, that multifamily pricing may be approaching bubble territory; others have theorized that we may begin to see some of these units converted from rentals to condominiums either due to pending oversupply or to allow their owners to profit from the high prices that have resulted from the current under-supply of available homes for sale.

Source: Mortgage Daily