Despite all you’ve read—or all you’ve experienced at home or in the office—it seems Millennials and Baby Boomers are not quite so different after all. At least when it comes to their housing preferences.
According to Kroll Bond Rating Agency, both have a growing penchant for renting. Covering a recent KBRA study, GlobeSt.com reports that, “While the Great Recession was likely a major contributor to the drop in home ownership rates, demographic trends will influence housing trends for the foreseeable future,” and those trends point to renting.
This, of course is great news for multifamily managers and owners. But why is it happening? As writer Paul Bubny reports in the story, while Millennials and Boomers come to the same conclusion about renting, they do so for very different reasons. Let’s start with Millennials, which, as Kroll points out, now officially squeaks by Boomers in terms of population size. (In fact, drawing on statistics from the US Census Bureau, Kroll states that as of 2015, the Millennial headcount was 75.4 million, compared with Boomers’ 74.9 million.)
“At the Millennial end of the age spectrum,” writes Bubny, “commitment to marriage and starting a family are occurring later than in previous generations. Just 27% of Millennials are currently married, compared with 48% of Baby Boomers that were married at the same age, based on Census Bureau data.”
We also have to figure in the issue of buying power, and Kroll states that Millennials have “the lowest average credit scores of all the generational cohorts.” Add to this the affordability factor, with 32.5% of Millennials claiming this as a top concern.
As proof, the firm cites the National Association of Realtors’ Affordability Index: “With a value of 100 as the base median income required to qualify for a mortgage, the index has declined from 214.5 four years ago to 162.0 this past January.”
But what of Boomers? While Millennials struggle with fiscal concerns, the older cohort is making lifestyle choices, which, according to the report, “will influence housing trends for the foreseeable future... Baby Boomers do not want to be tied down to larger, underutilized suburban homes as they age. As a result, they are downsizing to smaller rental quarters.”
Very often this is driven as well by the need to be closer to their urban/apartment-dwelling children, bringing these two apparently different generational groups closer together, both physically and in their housing preferences.
Read the full report at GlobeSt.com.
About the Author
John Salustri is editor-in-chief of Salustri Content Solutions, Inc., a consultancy focused on enhancing the web and print content of clients around the nation. He is a regular contributor to JPM Magazine and a frequent blogger for IREM’s website. Prior to launching SCS, John was founding editor of GlobeSt.com, the industry’s premier real estate news website, where he managed the daily output of 25 international reporters, and prior to that, he was editor of Real Estate Forum Magazine. John is a four-time winner of the National Association of Real Estate Editors’ Award for Excellence in Journalism.