Current Economy a Boon for Landlords

With rents rising and more classes of people choosing to rent, now is the time to be a landlord according to the latest data from the Federal Reserve. They recently reported that landlord rental income totaled $168 million in just the last three months of 2015. This represents 4.3% of the U.S. national income.

As a point of comparison, in 2007, landlord rental income was only 1.5% of the U.S. national income. The 2015 numbers are the highest going back seven decades, to the previous high in 1946. A recent Bloomberg article points to several factors in this shift: the subprime crisis, stricter mortgage requirements and changes in millennial behavior (delaying marriage and family).

The article goes on to point out the negative factors that come from a drop in home ownership, namely the widening of the income gap and the subsequent social disparity. The author argues that by normalizing rents, the overall economy would improve. But the most dramatic change in home ownership would occur after economic growth, leading to increases in income.