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5 Biggest Reasons Millennials Prefer Apartments To Houses

5 Biggest Reasons Millennials Prefer Apartments To Houses

 

It hardly remains a secret that most of today’s renters likely fall into the millennial age group.

The number of 18 to 34-year-olds who own a home has fallen to a 30-year low and for the first time in more than a century, young people are now more likely to live with their parents than with a spouse.

Times, they are a-changing.

The demand for apartment homes among millennials has skyrocketed. This young adult age bracket has essentially been driving the recent major rental market increase of the last few years and there are quite a few reasons why this is happening.

 

1. PURCHASING MEANS MORE DEBT

With student loans accompanying the majority of recent grads after college, it’s not a surprise that millennials prefer submitting a monthly rent check over the acquisition additional mortgage debt.

While in some cases mortgage payments can compete with rent prices, recent grads likely don’t have the necessary funds for an initial down payment. 

a-new-lease-on-millennials-what-do-gen-y-renters-want-3-638.jpg(Source: AppFolio)

Millennial renters in expensive metropolitan areas tend to widely underestimate the amount needed for a down payment, in many cases by 50% or more.

It's been estimated that the majority of millennial renters will need a decade or more before they can afford a 20% down payment on a home.

Why They Rent: Mortgage Debt, No Down Payment, Easier Qualification

 

2. RENTING IS MORE AFFORDABLE 

While renting requires accustomed rent and utility payments, home ownership requires a much larger financial obligation.

recent research study indicated that the vast majority of millennial renters (79%) want to purchase a home, but that affordability is the biggest obstacle that they face. 

Screen Shot 2016-11-01 at 2.55.24 PM.png(Source: ApartmentList)

Homeowners must account for maintenance, repairs, vendors, property tax, and perhaps association fees in addition to the utilities and mortgage.

With most millennials on a tight budget, this is easy to conclude.

Why They Rent: Tight Budget, Additional Costs

 

3. AMENITIES ARE APPEALING 

Most apartment communities come with a pool and fitness center gym. But apartment amenities seem to be bigger and better each time a new community is built.

Amenities such as Zen gardens, dog parks, and rooftop terraces are just the tip of the iceberg. I’ve seen communities go as far as offering things like wine cellars, spas, and bocce ball – all accessible without stepping foot outside the complex.

635805182356125190-Dogs1.jpg

In fact, the idea of having access to amenities has become so appealing to millennials that most say they plan to rent for the foreseeable future.

Why They Rent: Amenity Access, Convenience

 

4. GEOGRAPHIC FLEXIBILITY

When renting, you have the ability to choose where you want to live (generally speaking). Millennials love choices, and with larger cities providing unique submarkets, they can choose where they want to live based on what’s most important to them.

Joe-Eisner_E-7th-St-Condo_2.jpg.rend.hgtvcom.1280.853.jpeg

Urban areas are extremely attractive for the ‘Y generation’. Residing in the city provides access to retail, restaurants, entertainment, and a variety of other tempting options.

Millennials drawn to the liveliness of metropolitan areas likely can't afford to own a home there. If city living is a priority, millennials will certainly sacrifice homeownership to get the location they desire, and that means renting.

Why They Rent: Location Options, Surrounding Access & Entertainment

 

5. FREEDOM TO MOVE

Recent college grads enjoy the freedom to move around. As this generation’s professional careers are just beginning, so to are their lives as an adult. Settling or being confined to one location is a bit daunting and for this reason, renting an apartment (instead of moving right into homeownership) seems like the smarter decision.

asking-a-maryland-tenant-to-moveout-of-your-rental-property.jpg

Young people can relocate for a new job or personal opportunity without being tied down to a mortgage payment. Millennials are focused on finding the right job, a city that fits their personality and exploring new things. 

Why They Rent: Flexibility, Dynamic Desires

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This comment was minimized by the moderator on the site

Relocation for employment has been a fact of life, which requires resale for owners.
Would smaller, high density owner units be more appealing to the new generation of real estate users?

  Marc Farris
This comment was minimized by the moderator on the site

A strong argument can be made for that. There's not enough data yet (that I'm privvy too) that would convincingly state that as a 'yes' or 'no' entirely. However, that is another popular discussion topic I hear quite a bit about. Perhaps it would...

A strong argument can be made for that. There's not enough data yet (that I'm privvy too) that would convincingly state that as a 'yes' or 'no' entirely. However, that is another popular discussion topic I hear quite a bit about. Perhaps it would be best served as a future content piece.

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  Drew C Brucker
This comment was minimized by the moderator on the site

Great information that I plan to share with my Residential Property Management students and other apartment advocates. But an apartment is a "home". I really wish you had used the term "house" instead of "home".

  Carla Earhart
This comment was minimized by the moderator on the site

Let's change that terminology to gain more respect for this housing option...apartment homes instead of units, apartment communities instead of complexes, community directors instead of landlords, residents instead of tenants, etc. Words matter!

  Carla Earhart
This comment was minimized by the moderator on the site

I've changed the title to reflect "houses" instead of "homes". I understand both sides of the argument and naturally, both can be considered correct. Regardless of the title, I hope that the content itself resonates with you or your team. Thanks...

I've changed the title to reflect "houses" instead of "homes". I understand both sides of the argument and naturally, both can be considered correct. Regardless of the title, I hope that the content itself resonates with you or your team. Thanks for reading.

Read More
  Drew C Brucker
This comment was minimized by the moderator on the site

Thank you!

  Carla Earhart
This comment was minimized by the moderator on the site

Another article that takes 83 million people and paints them with broad, oversimplified generalizations. "Millennials like...", "Millennials want...", spare me. Nonsense buzzwording.

  Jon
This comment was minimized by the moderator on the site

Jon -

Sorry you didn't enjoy the topic/title. I can discuss in further detail why this sort of classification is necessary to call out, if you're willing.

  Drew C Brucker

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