Are Millennial Renters Here to Stay?

July 6, 2020

While every generation challenges, when it comes to housing, Millennials are the most misunderstood.

The second-largest group in America is the Baby Boomers’ grandchildren, the Millennials. Born between 1981 and 1997 this generation grew up with a surge of technological change and entered adulthood with the challenge of the Great Recession[1].

Beyond the Stereotype

Often this generation is pigeonholed as free-spirited, chasing experiences over possessions. This stereotype lends to the belief that Millennials choose to rent to complement their desire for upward mobility[2] and hands-off maintenance[3] lifestyle. While the ideology bears elements of truth, it doesn’t tell the whole story.

Affordability & Savings

Despite plans to purchase homes in the future, traditional timeless for purchasing a home are significantly delayed. Despite a desire to purchase a home, 72% of Millennial renters specifically cite affordability as their reason to continue to rent.

As you can imagine, saving for anything becomes a struggle of possibilities when launching a career and burdened by student loan debt (let alone other forms of debt). With 45% of Millennials encumbered by an average of $29,800 in student loan debt this generation’s struggles to save is real.[4] Factor in a rise in housing prices and the impact of the Great Recession as they began careers and it’s easy to understand why the Millennials struggle to save for a down payment to purchase a home. (Time will tell the impact of COVID-19.)

As we watch the US economy continue to flocculate and consider what leaders suggest about inflation, Millennials are likely to remain renters. With that in mind, the need for quality well-run multifamily assets should produce a win-win between investors and Millennials. 

Written by Julie Holly

[1] The Anatomy of a Millennial Renter, Smart Move 2017

[2] Why Millennials are Renting More — And Why It Works for Them 2018

[3] 2018 Millennial Homeownership Report: American Dream Delayed, Apartment List 2018

[4] Meet the average American millennial, who has an $8,000 net worth, is delaying life milestones because of student-loan debt, and still relies on parents for money

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