Renting a “home” is no longer solely for singles or couples starting out on their own. Family renters are decidedly on the rise, keeping in mind that there are many different types of “family units” today. This is a dynamic that has been evolving in the housing market over the last 10 years as a result of America’s changing lifestyles, age demographics and economic conditions. With a growing number of millennials starting families, baby boomers retiring, empty-nesters downsizing and Americans preferring flexibility and personal freedom, housing preferences are shifting towards the rental property.
The U.S. Census Bureau is predicting that the number of people between the ages of 30 and 50 (the prime age for forming families) will grow significantly more in the next decade. Between 2010 and 2020 the number of these households increased by about one million, but between 2020 and 2030 the number is expected to grow to approximately eight million. Additionally, home ownership has declined among most age groups and income brackets, primarily young and middle-income, as home ownership is too expensive. However, while middle-income and young families may lack money for a down payment and upkeep on a home, they may have enough income to afford an upgraded family rental with no down payment and no upkeep – not even lawn maintenance.
Rental townhouses are appealing to individuals desiring to remain in their current, well-established neighborhood, but need additional space to expand the family. Needing more space might also be to care for a family member, or start a business from home. No matter the reason, this option is popular for many who may feel priced out of home ownership. It’s primarily the same with urban rental units and apartments, only it’s in the city in a more-dense environment. Whether urban or suburban, families are finding it more difficult to afford single-family homes. So, renting or leasing is an ideal option.
Economics is not the only driver for families renting instead of buying. Some Americans no longer believe that owning a home is an essential part of the American dream. There has been a shift in society’s priorities and many prefer more flexibility, portability and taking advantage of opportunities. The concept of living in a home for 30 years is being replaced by the flexibility of a lease, as people enjoy living in a home environment without all the financial and logistical limitations of owning. Downsizing baby boomers and empty nesters are attracted to renting, as they are able to live comfortably and save for retirement without sinking cash into a home.
Many Americans are on the move and have definitely changed their priorities. People are living longer, working longer, moving around more, experiencing more – whether single, married or with children. Developers have had great success targeting singles with luxury and high-density buildings in the past, but we can expect them to notice and shift with these changes to provide more family-oriented rental housing. Families will not be going away and the housing market will adjust!
Have a great weekend!