Home Builder Giants Toll Brothers, Lennar Corp. Aggressively Pursue Renters

Toll Brothers and Lennar Corp., two of the top home building companies in the U.S. are pushing harder and more aggressively into the rental segment of the industry.

Toll Brothers Inc. has revealed its plans to further widen the coverage of their apartment-development division which has only covered the Boston to Washington, D.C. corridor. According to The Wall Street Journal, the company is planning to increase its investments in the segment by up to $300 million.

Another company, Lennar Corp., has also announced in July that it has gathered investment shares totaling $1.1 billion to fund their efforts to build and hold apartments in 25 key areas of the U.S. market. Lennar also said they have every intention to add to the fund and double it to $2 billion in a year's time.

According to The Real Deal, the two companies are optimistic about their plans seeing that young adults prefer to rent long term compared to people from older generations. Vacancy rates of apartments are down 4.2 percent which is the lowest it has been in 15 years. In a report by the Pew Research Center, 48 percent of the 18 to 34 years old demographic who are living with several adults are up as compared in 2007 when there was only 44 percent. Another encouraging sign from Pew Research Center is that its data shows that young adults who are currently residing with their parents will want to have their own place to rent soon.

Lennar president Rick Beckwitt said that there are over three million young adults who are living with their parents and a big majority of them will want to rent. Beckwitt was also careful not to sound too confident as he said in the interview, "it's too soon to tell if there has been a fundamental shift in homeownership rates. What we do know today is there is demand on both side."