Are Millennials turning away from the traditional American dream of owning a home? Not entirely. But a recent report from Apartment List shows that these younger adults aren’t quite as excited about owning a home as were the members of previous generations.
And what impact might this have on the multifamily market? It might provide a nice boost as Millennials continue renting later in life when compared to their peers from previous generations.
According to the Apartment List report, homeownership rates among Millennials continue to trail previous generations. At age 30, 42 percent of Millennials own homes. That’s down from 48 percent of Gen Xers when they were the same age and 51 percent of Baby Boomers.
And some Millennials are in no hurry to buy. The Apartment List survey found that 18 percent of Millennials say they want to rent forever. Last year only 12 percent of Millennials told Apartment List that they never wanted to buy a home.
The big reason for this? Home prices. Of those Millennials who said they never wanted to buy, 74 percent told Apartment List that affordability is their primary reason. That is more than double the percent of Millennials who said they didn’t want to buy because they prefer the lifestyle benefits of renting.
Even those Millennials who do want to buy aren’t always prepared to make the move to owning. Apartment List said that among Millennials who do plan to buy homes, 63 percent do not have any dedicated down payment savings set aside. Only 15 percent have saved more than $10,000.
And what about the COVID-19 pandemic? Not surprisingly, it has influenced Millennials and their homebuying plans. Apartment List’s survey says that 40 percent of prospective Millennial homebuyers say that the pandemic has directly affected their plans, with 21 percent now delaying homeownership largely because they’ve lost income and/or diminished savings.
The big takeaway here? Don’t expect demand for multifamily units to slow any time soon.
