The dip in homeownership rates isn’t just taking place in one particular city in the U.S., but across the entire rental market. A significant portion of the millennial generation either decide not to own property, or they can’t afford to own homes.
Millennials are driving the rental market; this means that children born between 1978 in the late 90s have graduated from college, and they are using their post-collegiate dollars to live in apartments -not new homes.
There are several reasons why these young people have opted to rent. Because of student loans and other debt, many feel strapped for cash, and they can’t be bothered by the idea of saving for a down payment. Additionally, many like to move around, quickly find new jobs, and embrace economic opportunities as they occur.
Millennials have a perspective on property ownership that differs significantly from past generation. They frown at the idea of purchasing home and building equity. Instead, they want value, adventures, and jobs that speak to their nomadic natures. It’s also important to note that many saw their parents lost their homes and wealth during the market crash just a decade ago.
Approximately 54.4 percent of the apartments on the rental market right now are one-bedroom or studios, to meet the desires of millennials, who are often in search of affordable living, according to an article featured in Forbes.
The minimalist mentality of the millennials is self-evident. They’re willing to accept less square footage for more significant savings. It’s also apparent when reviewing the fact that few own cars; many emphasize personal success over professional success, and many select areas adorned by experiences related to entertainment, shopping, dining, and walkability.
Regarding lifestyle, they’re also delaying marriage and subverting the American dream. Instead of a picket fence, many opt for picket lines, meaning they are very involved with social movements and causes.
If it’s unlikely that you’ll find a Millennial who’d be interested in a food desert with no accessible public transportation. Millennials want their rentals to affordable, and they want to be connected to the internet through their mobile devices and cell phones. For that reason, to market to them effectively, it’s important to put information where they’re always browsing, such as Twitter, Instagram, and Facebook.
There’s Good News:
Single-family rental homes are the flavor du jour. Many in the industry are choosing to purchase and flip houses for the lucrative real estate investment opportunity. It’s smart that some investors are making home rentals available to Millennial shoppers, granting investors a revenue stream that is long-term and consistent.