Even More Millennials Now Say They’ll Always Be Renters
It’s been a given in the apartment sector that Millennials are going to be more likely to rent than previous generations. ApartmentList notes that the homeownership rate among 30-year-old Millennials (42%) is lower than that of either Gen Xers or Baby Boomers at the same point in their lives, and says that 18% of Millennials say they’ll never buy a home, up from 12% a year ago.
Needless to say, the differences in economic fundamentals are largely responsible for this increased antipathy toward homeownership, rather than a generational doubling-down on central-city apartment living—especially during a period in which a good many of Millennials’ would-be favorite nightlife haunts are either closed or operating under severe capacity restrictions.
“2020 saw a rise in both unemployment and home prices, so it comes as no surprise that affordability remains the biggest roadblock to prospective Millennial homebuyers,” ApartmentList says in its 2021 Millennial Homeownership Report.
“To shield the housing market from a volatile economy, interest rates were dropped to near-record lows this year,” the report points out. “This makes it easier to finance a home, but only for those who can afford the upfront cost of a down payment. And many Millennial renters cannot.”
Among those who plan to always rent, 74% say they can’t afford homeownership. That’s a significantly higher percentage than those who cite the potential lifestyle benefits of renting, including added flexibility (34%) and avoiding unforeseen maintenance and expenses (32%).
“Interestingly, a second group of renters has emerged who are delaying homeownership because they are less certain of their housing preferences in a post-COVID world,” says ApartmentList.
The pandemic has forced everyone to consider the pros and cons of their current living situation, whether on grounds of price or location or amenities. For Millennials whose homeownership plans are now delayed, 28% say they’re reconsidering what type of home they want to purchase, while 27% are rethinking where they want to buy entirely. “An economy increasingly built on remote work instead of physical offices can have a big impact on where Millennials want to invest in the housing market,” ApartmentList says.
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
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