The rental market is still a hot commodity for Millennials, and that doesn’t appear to be changing any time soon. Young people aged 18-34 are continuing to choose renting in favor of home ownership – the numbers have been steadily increasing since 2006. There are a number of reasons that the younger generation is forgoing a mortgage. The most common reason is, of course, finances, but there are other factors as well.
First and foremost, Millennials are facing the sort of debt that an American generation has rarely seen, with the average college graduate facing down over $25,000 in student loans alone. Add an 8% unemployment rate and lower relative starting wages than their parents and grandparents before them, and you’ve got a recipe for people who aren’t willing to juggle yet another loan – or who can’t even qualify for one. Affordable housing is an absolute necessity, and even if they would realistically be paying a lower monthly rate for a mortgage, they just don’t have the current savings and means to make it happen. In addition, renting offers other perks for young people, as well.
With the entry-level job market still in flux and the necessity of gaining much-needed experience beating down their door, Millennials are changing jobs with a frequency not often seen. People in their 20s especially are switching positions and industries every few years as they try to find the right fit, or perhaps move into a better field. These career moves also require a certain amount of versatility for possible relocation, and renting is a better option than homeownership in this regard.
Rental properties also offer relief from many of the “hidden” costs of homeownership, such as maintenance costs or property taxes. Rent may be a higher monthly cost than a mortgage, but it often includes utilities, and there’s no yard work or appliance replacement costs to worry about.
Furthermore, rental environments offer a sense of community and amenities that may not be available with a house. Many complexes offer pools, community activities, BBQs, extensive grounds, gyms, and more. All this appeals to people who are still young and social, especially those who want to live in expensive urban environments like San Francisco or Seattle. These areas are very appealing to younger people, but don’t offer homes that they could reasonably afford. Renting lets them stay close to the action.
As you can see, there are many reasons that Millennials are remaining renters for longer than their predecessors. This is great news for people with rental properties – the rental market will remain strong for years to come! For more information about managing your rental properties effectively, give PURE Property Management a call.