Western

Like other property sectors, rental housing assets have experienced big swings in fortunes over the past few years. Historically high rent growth during the pandemic came to a halt amid new supply in many markets. And the end of cheap debt has stymied investment sales and is stressing investors who paid handsomely for apartments using short-term financing. But the situation could be worse. Housing remains in high demand, and despite higher mortgage rates and a collapse in home sales, a severe lack of inventory on the market continues to prop up home values and price out would-be buyers. In May, home prices across the country increased 5.9 percent over the previous year, according to the latest S&P CoreLogic Case Shiller U.S. National Home Price NSA Index. Rental housing owners and operators are the obvious beneficiary of those challenges, says Ivy Zelman, executive vice president and co-founder of Zelman & Associates, a Walker & Dunlop company that provides housing research, analysis and consulting. Move-outs attributed to home purchases clearly illustrate the trend. An apartment and single-family rental operator in Phoenix recently told Zelman that such move-out activity has dropped to about 13 percent from an historical average of 30 percent, she …