The Millennial Rental Market Trend Report
Millennials now make up just under one quarter of the total population of the United States. Compared with previous generations, millennials are much more likely to rent their homes rather than owning them. This means that landlords would be wise to pay attention to the needs and desires of this large segment of the rental market.
Who are the Millennials?
According to Pew Research, millennials are those between the ages of 18 to 34 years old in 2014. In the United States that means that this generation constitutes approximately 23.5 percent of the population. In many ways, millennials are markedly distinct from previous generations. This includes economic conditions, aspirations, racial diversity, and technological savvy.
Why Millennials Continue to Rent
High levels of debt are a key characteristic of the millennial generation. They have lower levels of both wealth and personal income than the two preceding generations. The group is also much more likely to be burdened with high levels of student debt, and have relatively high rates of unemployment and stagnant wages. These conditions have made it much more difficult for millennials to buy their own homes. According to the Federal Reserve, just 22 percent of 30-year-old millennials who has student debt also owned their own home.
At the same time, millennials are also much more mobile than previous generations. Millennials are more likely to move within their own city as well as around the country, which has made them much more reluctant to commit to a long-term investment in property.
The First Generation of Digital Natives
The millennials are the first generation in history who are digital natives. Unlike previous generations, they have not had to adapt to new technology; they've been born into it. For example, 81 percent of millennials are on Facebook, and they have a median friend count of 250. Access to the Internet and social media plays a much more central role in millennial life than other generations. For millennials, features like high-speed broadband Internet access are not considered desirable, but necessary.
Walkability and Urban Living are Highly Desirable
Millennials overwhelmingly favor urban living over suburban living. According to the PwC 2014 Trends Report, 39 percent of millennials lived in a major metropolitan city compared with just 30 percent of Baby Boomers.
A recent study from George Washington University looked at how “walkable” particular neighborhoods were. Walkability is defined by the ease of walking to everyday destinations, such as restaurants, work, school, and stores. A safe, walkable environment is not only considered necessary, but it is also aspirational for millennials since television shows such as “Girls” and “Sex and the City” feature characters who enjoy a walkable lifestyle. In contrast, Baby Boomers were raised on suburban sitcoms like the “Brady Bunch” where life in the city was a distant consideration.
The five most walkable cities in the United States, as determined by the George Washington University Study, are:
- Washington D.C.
- New York
- San Francisco
It is perhaps not surprising that these cities are also considered to be very desirable by millennials. With the relative safety, plethora of urban apartments, and easy walkability of each of these cities, they feature everything millennials are interested in. Landlords that are able to fulfill these needs will likely find it much easier to keep their property fully rented.
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