The entrance of Millennials into the workforce remains a potent force in the multifamily sector as these individuals have a high tendency to rent. Nationally, the home ownership rate descended to a 51-year low of 62.9% last year and is projected to remain in the low 60% band in 2017. The low rate is not altogether surprising given the Millennial's desire to remain mobile as well as their burdensome student debt. In addition, a cultural trend towards later marriage and family formation should translate into sustained demand for rentals and extend for the next 10 years in apartments.
Some newer assets will benefit from strategic locations in nice neighborhoods While others will face competition from a wave of development. In Boise, although we are facing significant apartment additions, we also have a captive renter pool as home prices are elevated. Even with the addition of over 3,000 units to our market in 2017, the vacancy rate in the Treasure Valley has hovered between 2 and 3.5 percent for four years, according to Mountain States Appraisals in Boise. While the vacancy rate hovers below market equilibrium, it has given property managers the opportunity to increase rental rates. This is promising news for both owners and managers for the last half of 2017.