"Rents are rising, vacancies are falling, household formations are growing and rental supply is limited," stated Oliver Chang in Morgan Stanley report. "We believe the demand for rental properties will continue to grow."
The formation of renter households has surpassed new owner-occupied homes since 2007, according to the U.S. Census Bureau. The last time that happened was in 1985. An average of 718,500 renter households a year formed from 2007 to 2010, while owner-occupied households decreased at an average annual rate of 147,250 during the same period.