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Article: The pending state of interest rates: while rising interest rates bolster rental demand, higher cap rates for apartment communities can follow. These conditions will also help define tomorrow's renter and condominium buyer.
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- Units
- Article date:
- May 1, 2005
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CopyrightCOPYRIGHT 2005 National Apartment Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Are bounding economy offers several pros and cons for the rental housing industry. While a stronger economy is clearly a favorable factor, there is also a downside. First, the recovering economy has replaced all the jobs lost during the recession and is now adding new ones. This net new job growth will provide the housing industry with fresh consumers, paycheck in hand, who need to find a place to live. The housing demand pie gets bigger.
Second, higher interest rates that usually accompany an economic recovery can be both good news and bad news.
On the brighter side, higher interest rates normally bolster rental demand, meaning more traffic and more ...