According to Forbes’ recently published article, “Why Millennials Love Renting.” It seems like the American dream of the white picket fence and home ownership has been put on hold for consumers between the ages of 18 and 34.
However, you can’t blame generation Y for not jumping into home ownership. When many millennials graduated from college and entered the workforce, the economy was in a downturn. They also saw their parents home value plummet during the great recession and subprime mortgage crisis of 2007-2009. These experiences overwhelmingly affected a millennial’s aptitude to jump into home ownership According to Forbes, only 11 percent of consumers ages 20 to 29 have a mortgage today, compared to 30 percent of all consumers nationwide.
Tre Nardone, a 27-year-old commercial real estate agent who rents an apartment in downtown Phoenix, said in an interview, “I feel like I’m finally hitting my stride with my job. It took me a couple of years to figure out what I wanted to do. To be honest, home ownership has not been on my radar,” admitted Nardone. “I think when I’m 30-years old I’ll start to think about it. Right now, I just enjoy the flexibility of a year-to-year lease.”
Larry Connor, the president of The Connor Group, a real estate investment firm that owns and operates a wide range of apartment living complexes near Cincinnati near Cincinnati, sees similar trends among the millennial population in his area.
“Apartment living offers flexibility,” remarked Connor. “Millennials also want to live in a community where there are other people their age. When people are 25-years-old, they don’t necessarily know what they want to do the rest of their lives,” said Connor. “An apartment gives them a great place to live and they don’t have to be tied down.”
Connor also explained that millennial renters enjoy their amenities, like a swimming pool and work out center. For a young adult on a budget, living somewhere that cuts down on other discretionary costs like gym membership is a huge bonus.
Another reason why more millennials are choosing apartment rentals is the increase in the number of single Americans, which now compromises more than half of the adult population. Delayed marriage rates among millennials have drastically affected home ownership rates. However, Market analysts predict that once millennials become more established in their careers and families, they will begin considering home ownership options at a more justifiable level.
As millennials are entering a transitional period in their lives, many are getting married and taking on new responsibilities that come with parenthood, we predict that the real estate market will begin to look much more appealing for young adults in the coming years. For brands in the housing market, that means a huge wave of millennial consumers are getting ready for the next major milestone in their lives, which is often buying a home. Staying on top of millennial trends and being smart about the types of engagements you create will be imperative to prepare for this new wave of millennial homebuyers.