Special offer

Why Millennials are Choosing to Rent

By
Services for Real Estate Pros

why millennials love renting

 

Millennials have come of age in challenging times. Younger adults ages 18 to 34 are currently facing an 8 percent unemployment rate and around $1 Trillion in student loan debt. It should come as no surprise then that a growing number of 20-somethings are choosing to rent instead of buying a home. In fact, Jed Kolko, Chief Economist for Trulia reports that home ownership for those ages 18-34 has fallen to about 13.2 percent, a new low in many metropolitan areas. The philosophy seems to be, if you’ve got to start out saddled by student debt, why not at least enjoy a little luxury (and a lot of options)?

 

Renting is a Top Option for Millennials

Apartment rentals have become the primary housing solution for younger workers in the Washington Metro area—as well as in other metro regions around the nation.  Ryan Jenkins, author of The GenEdge, mentioned recently that, “59 percent of millennials would rather rent a house than buy one and only 1 in 4 are likely to purchase a house in the next 5 years. “

Why are apartment rentals so appealing to millennials? It’s not simply a matter of finances.

 

Affordable Luxuries

Amenities matter. Many apartment buildings feature cool amenities that appeal especially to younger tenants, like onsite fitness centers, movie screening rooms, electric car charging ports, underground garages, unlimited Wi-Fi and cellular service – all provided for free to residents. These small luxuries would cost a fortune as a la carte services, so bundling them economically into a rent payment represents a major plus for this demographic.

 

Instant Community

In the transition from college life to career and family, apartment complexes with shared community resources offer an ideal setting for building new friendships. It’s the promise of instant community—without the long-term commitment. And features like meeting rooms and coffee bars allow for impromptu small gatherings. Being able to enjoy downtown clubs, restaurants, and other entertainment without having to move to the suburbs is a plus too.

 

Maximum Flexibility

Renting is the perfect solution for a generation that prizes the freedom and autonomy of a nomadic lifestyle. On the popular social commentary blog The Cultureist, Britany Robinson comments “We’ve seen the demise of the housing market, we’ve experienced the pain of digging our way out of debt, and we know the freedom of location-independence is available if we’re interested.”

And then there’s the matter of simple economics. According to the US Department of Labor, millennials tend to change jobs more often than older workers, and on average stay with any one employer for three years or less. It's a sign of an economy that’s still limping toward recovery.  This younger generation of workers, having come of age in a time of huge economic uncertainty, tends to prioritize flexibility.  And renting an apartment offers the ultimate lifestyle flexibility. Another plus? Apartments often come with a variety of leasing options, allowing tenants to leave on short notice to pursue a new opportunity.

 

Lifestyle Upgrade

While the “lifestyle upgrade” apartment complexes offer make them a top option among younger renters, the growing demand for rentals crosses property types. Landlords for single-family residential properties are seeing the trend as well—as this infographic by a Northern Virginia property manager attests. Private homeowners facing relocations are, more and more often, choosing to rent out their homes to await better home prices and a stronger first-time homebuyer market. 

 

And how will they compete for millennials’ business? By bundling in plenty of amenities—and keeping leases flexible.

 

 

Wayne Zuhl
Remax First Realty II - Cranford, NJ
The Last Name You'll Ever Need in Real Estate

Hi Maureen,

Very well constructed first post. Welcome to the 'rain!

Mar 22, 2015 08:04 AM
Maureen Hannan

Thanks, Wayne and Jean! 

Mar 22, 2015 08:14 AM
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Maureen, you can easily see you know how to write a post! Welcome to AR! You may be new to us, but not to writing!

Mar 22, 2015 08:35 AM
Maureen Hannan

Aw, thanks, Evelyn. Writing is fun for me--and writing in community is the best of all. :-)

Mar 22, 2015 10:40 AM
Odaly Victorio
Team Victorious at Keller Williams Realty - Jupiter, FL
Marketing Expert

Great job Maureen Hannan!  I wish these burdens weren't so great on our kids.  This generation who remembers 9/11 and the great recession, definitely looks at money differently. 

Mar 22, 2015 10:57 AM
Maureen Hannan

Thanks for your comment, Odaly. The thing that surprises me is how many people don't seem to understand that when those just starting their careers can't manage to save up enough for a down payment or qualify for a mortgage, we're all affected profoundly. 

Mar 22, 2015 11:15 AM
Captain Wayne - Rowlett Real Estate School
Rowlett Real Estate School - Panama City, FL
Rowlett Real Estate School / Owner and Instructor

Great job on your post Maureen!  Welcome to ActiveRain.  I am looking forward to seeing more of your blogs.

Mar 22, 2015 02:08 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Maureen - It look like there are a lot of reasons why the millenials are not jumping into home ownership.

Mar 22, 2015 03:42 PM
Maureen Hannan

Thanks for the comments, Christine and Wayne! Nice to "meet" you here. :-)

Mar 22, 2015 09:17 PM
Robert Bob Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX ( West of Houston) Real Estate Expert

Good review of why mennennials want to rent instead of buy. You mentioned flexibility and i think this is a key reason. They do not want to be tied down to a house payment and obligations which go with owning a home. 

Mar 23, 2015 08:08 AM
Maureen Hannan

Great point, Bob. I agree 100 percent. I would also maintain that part of the reason this generation thinks differently about "being tied down" is because they've HAD to think differently. When you can't even find a job other than an unpaid internship after college graduation, then the "gap year" voluntourism starts sounding good And then one thing leads to another and you realize it's kind of nice not being tied down. All my observations are anecdotal of course...but I do think the "psychographics" of the Millennials have been shaped by which doors were open and which doors were closed, right at the time they were looking for jobs and housing.

Mar 23, 2015 08:26 AM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Not a matter of choice to buy or not, just forced to rent. And then as the rental housing accommodations tighten up, get more upscale, the chances of buying get more remote due to the mounting debt of the accumulation years... and carrying the college four year bubble debt, the high cost of living too.

Mar 26, 2015 07:47 PM
Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

Great points made.  I agree with you that most millenials are not going buy because they can't.  We need to get them out of their debt cycle or prevent them from gettng into it in the first place.  Don't see any reason why the college education is so expensive in the US, while the 3rd world Countries offer them for free!!!

Mar 26, 2015 08:36 PM
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

Many millenials cannot buy a home because of their student loans and debt ratios

Mar 26, 2015 08:46 PM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Had a married couple who were Millenials apply for one of my rental properties. They had together over $100,000 in student loan debt, and equal that in signature debt. No way they could qualify for a loan.

Mar 26, 2015 10:41 PM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

It's an interesting trend, especially here in Seattle.  A lot of them are young, unattached and can afford the high rents. It will be interesting to see what happens when they decide to settle down. Thanks for your post!

Mar 27, 2015 12:02 AM
Mike McCann Nebraska Land Broker
Mike McCann - Broker, Mach1 Realty Farm & Commercial Land Broker-Auctioneer Serving Nebraska - Kearney, NE
Farm & Commercial Property For Sale 308-627-3700

Most in this age bracket...(and I have 2 children in that age bracket)...cannot afford to own as the homes have gotten too expensive. Sounds just like when I was in that age bracket.  8% unemployment is probably low and many are underemployed.   Welcome to the Rain Maureen Hannan 

 

Mar 27, 2015 12:24 AM
Trumps Elite
Keller Williams Realty Acadiana - Lafayette, LA
Realtors/Career Consultant

Great article and information.  Welcome to Active Rain. Looking forward to reading more from you I the future. 

 

 

Apr 23, 2015 04:40 AM
Captain Wayne - Rowlett Real Estate School
Rowlett Real Estate School - Panama City, FL
Rowlett Real Estate School / Owner and Instructor

Excellent post about the Millenials.  Thanks for sharing your views.

Jun 01, 2015 12:17 AM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

There is one more factor that was recently published in CAR survey: 

Data shows that significantly more millennials are currently single/never married than was true for those in older generations, and considerably more are in domestic partnerships. Specifically, more than half of all millennials (59 percent) have never married, and 9 percent are in domestic partnerships.  For millennials currently aged 18 to 30, just 20 percent are married, compared with nearly 60 percent of 18- to 30-year-olds in 1962. Millennials are clearly delaying marriage longer than any generation before them, which could have a significant impact on household formation.

May 24, 2016 04:25 AM