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Youth-Driven Rental Demand Attracts
Investors as Supply Pressures Ease
Young adults keep household formation elevated. Orlando’s population swelled by nearly 80,000 people last year, fueled by young adults and wealthy retirees. This dynamic, coupled with expectations for steady job gains, is anticipated to strengthen household formation this year, particularly among young professionals who may have delayed moving out due to the pandemic and elevated inflation. With the metro projected to record the highest household formation rate in the country this year and the gap between the average mortgage payment on a median-priced home and monthly rent holding at over $1,500, housing options will be limited for many individuals. Growth in the local renter pool should help to absorb new units as deliveries are forecast to moderate, with supply pressures easing most notably in Kissimmee and Horizon West. Class A apartments are expected to experience improved fundamentals as a result, reflecting a wide-ranging renter base that will position Orlando for one of the fastest rent growths nationwide this year. At the same time, completions are shifting toward areas like Pine Hills and Oak Ridge, driven partly by more relaxed zoning laws. Elsewhere, developers in St. Cloud and Osceola County have reported local opposition to newly proposed projects, which may deter other builders from targeting these areas.