As millennials age into their 30’s and 40’s, they are quickly becoming the most important generation in the housing market. Unlike prior generations, many millennials prefer condensed, apartment living. Millennials like walkable areas, apartments with amenities, and getting packages delivered safely. Millennial renters must weigh many considerations when it comes to renting or buying an apartment.
What Exactly Are Millennials?
Millennials are the largest generation in the U.S. with 75 million people. While the exact cutoff for millennials can be squishy depending on who you ask, millennials are generally thought of as people born between 1981-1996. This means that millennials are between 24 to 40 years old in 2021.
The generation above millennials is Gen X (1965-1980), whereas the generation below millennials is Gen Z (1997-2012). Common cultural cut-offs between millennials and Gen Z are that millenials remember the 9/11 attacks and that millenials experienced at least some of their childhood without the existence of smartphones.
Six Surprising Statistics About Millennial Apartment Living
1. About 1 in 5 Millennials Plans to Rent Forever.
It’s no secret that buying a house is difficult for millennials. House prices have increased at a much faster rate than wages, making buying a house more challenging for millennials than previous generations. Millennials were also just entering the workforce as the Great Recession hit. Because recessions hit younger generations harder, the recession made buying a house even more difficult for millennials. This difficulty in buying property has caused many millennials to give up on the housing market and plan to be forever renters.
In fact, each year more millennials believe they will be forever renters. In 2016, only 10.7% of millennials planned to be forever renters, but by 2020 this number was 18.2%. Among the millennials who plan to be forever renters, 74% of them say it is due to the unaffordability of houses, not out of preference for the more flexible lifestyle renting may allow.
2. During Their 20’s, Millennials Will Spend About Half of Their Income on Rent
From age 22-30, millennials spend about 45% of their total income on rent. This amounts to $93,000! This percentage of income is substantially higher than it was for Gen Xers (41%), and significantly higher than it was for baby boomers (36%). Unfortunately, Gen Zers, who will spend over $100,000 on rent during the same ages, will likely face an even tougher burden than millennials when it comes to renting in their 20’s.
3. A Majority of Millennials Get a Package Delivered Every Week
63% of millennials get a package delivered each and every week. For apartment buildings, this is a big logistical hassle. Apartment building managers need to figure out how to securely get every package to every resident. This task becomes even more daunting when considering that over a third of Americans have experienced package theft, with the average value of a stolen package being over $100. With so much money on the line and such an abundance of packages to sift through, many residential apartment building managers are opting for smart lockers as a safe, efficient way to sort and distribute packages.
4. Most Millennials Renters Live in Apartments
As of 2015, 60% of millennial renters lived in apartment buildings or condominiums. Millennials’ preference for location over size is one reason that more millennials live in apartments. Another reason is that apartment units are typically easier to rent than single family homes, and as noted above, housing costs are substantial for millennials.
Moreover, millennial renters are much more likely to live in cities as compared to millennial homeowners, who are more likely to live in the suburbs or exurbs.
5. Millennials Will Pay More to Live in a Walkable Place
Rather than being out in the suburbs, many millennials prefer a more urban lifestyle. 68% of millennials would pay more to live in a walkable area. Perhaps even more surprising, 25% of millennials will pay ‘a lot more’ to live in a walkable place. This preference can be partly explained by millennials’ preference to modes of transport other than cars. Fewer millennials own drivers’ licenses than older generations, and more millennials prefer public transit, walking, or biking compared to driving.
One reason millennials are more likely to live in apartments rather than single family homes is precisely because apartments tend to be in more walkable areas.
6. Millennials Have a Strong Preference for Amenities
Millennials who rent apartments want more than a room to sleep in at night. Millennials want amenities in their apartment complex. This preference has led to an astonishing growth in apartment construction across the U.S. Builders are erecting apartments at three times the frequency they were just a decade ago, at a rate of about 340,000 units per year. The amenities millennials desire include fitness gyms, outdoor recreational facilities, wifi, and a lounge area or party area. Millennials want these amenities much more often than their Boomer counterparts.
The landscape of housing in America is always changing. As millennials age into parenthood, there will likely be a shift out of the cities and towards the suburbs. However, we have yet to see how dramatic that shift will be. Will as many millennials move to the suburbs as Gen Xers and Boomers did? Or will significantly fewer leave the city centers? As the millennial story unfolds over the next decade, Gen Zers will age into an increasingly difficult housing market.