For the most part, renter demand justifies investors exuberance for multifamily. “National apartment occupancy averaged 94.6 percent at the end of 2011, almost three percentage points higher than the bottom point at the end of 2009. Occupancy growth is buying rents. Rent increases approached 5 percent in 2011 and should continue to rise by 4 or more percent by the end of the year.
These increases are due to the population of 20-34 year olds (a prime renter demographic) will grow every year between now and 2030. As employment improves, more of these 85 million Generation Y members are moving of of their parents and into their own apartments. The notable drop in the home ownership rate from 69 percent in 2005 to 66 percent in 2011 created more than 4 million renter households during that period. The occupancy is rising, multi family faces a supply shortage. Construction of new multifamily product hit bottom in 2011.