Young Adults Prefer to Rent | Property Management Blog

Why Millenials are Renting More?

The real estate market today is marked by several prominent trends that impact everyone from homeowners to tenants and property owners/investors. One trend is a steady increase in home value. Another trend is tight supply throughout the country. And another trend – perhaps one of the most important in terms of overall implications for property management – is the reluctance of the younger generation to buy homes. This piece from the New York Times tackles the growing trend of young adults who forgo buying homes and instead choose to rent. They primarily handle the issue from the standpoint of adults who rent apartments, but the same lessons apply to single-family homes. In short, the trend is simple: adults aged 18 to 34 are choosing to rent in droves, instead of doing what their parents and grandparents did and buy a home. Some of these have previously purchased a home and, for whatever reason, decided to get out of homeownership and rent. Others have never attempted to buy and have been stalwart renters and eternal tenants ever since high school and college. Reasons for this vary. Perhaps the main reason is that for many of these young would-be homeowners, getting a mortgage is highly difficult, if not impossible. It’s easy enough for veterans, who have access to zero-down-payment VA loans, but for everyone else, it has become next to impossible. A higher difficulty in getting a mortgage directly translates into a lower homeownership rate, not just for these young tenants but for older people as well who have either been burned by bad experiences in home ownership (such as foreclosure) or have been wary of the housing market and what it has been like over the last decade. The implication from a property management standpoint is clear: the 18-to-34 demographic is ripe for business and will constitute one of the main targets for property owners and investors for the future as this generation grows and advances. Some of them will eventually buy a home, especially once they are able to afford it, but many will still want to rent even as they mature and get older. This means that property owners should have a definite interest in courting members of this generation, and should tailor their properties to match the needs and desires of this demographic.

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