Hollywood – February 24, 2016

THERE ARE MORE RENTERS NOW IN ALL AGE GROUPS

In addition to renters younger than 25, there has been an increase in the number of renters in all age groups over the course of the past 10 years. Traditionally, the rental demographic has been led by young adults, but this new data shows that more adults in their 30s-60s – and beyond – are opting to rent.

A number of factors have contributed to the shift, which opens up several new target markets for multifamily properties that are seeking to fill vacancies. While young adults continue to rent in large numbers, prospective tenants are no longer restricted to that one group.

According to a report from the Harvard Joint Center for Housing Studies, released in December 2015:

“Rentership rates among gen-Xers and baby boomers are also rising, changing the traditional profile of the renter population. While the conventional image of renters is groups of young unrelated adults living together, these types of non-family households make up a relatively small share of all renters and their numbers have grown only modestly in the past 10 years.”

This new renter profile includes families with children (an additional 2.2 million in the past 10 years), and people in higher income categories than in the past (3.3 million with an income of $50,000 or more; 1.6 million with incomes of more than $100,000).

All told, there are nine million more renters now than there were in 2005. That increase is due in large part to foreclosures and tightening mortgage requirements over the past several years, but it also includes individuals and families who have chosen to rent because of the flexibility or lifestyle it offers.

A U.S. News and World Report article from April 2015 highlights many of the reasons baby boomers are choosing to rent, including: “For seniors who’ve been responsible for house and property maintenance for years, having someone around who can fix a plumbing issue and mow the grass is a huge benefit of renting… for boomers who are interested in living somewhere new each year or trying out a new city or town before making a permanent commitment, renting can be a valuable option.”

A New York Times article from October 2015 took a look at young families who chose to stay in their apartments because of the sense of community they had achieved there:“Then there are the families that stay put…because of close-knit relationships, especially those forged among children. These parents are willing to make significant sacrifices in space and living expenses to preserve the uber-local community their families have formed with others in nearby blocks or even inside the same building.”

That article focuses specifically on families who live in tiny, New York City apartments, but we know that that same sense of community matters a great deal to many of our tenants in our much more spacious, suburban multifamily properties.Housing choices are not simple financial decisions: Quality of life, access to nearby schools and amenities, good neighbors and many other factors weigh into the equation for most renters. Families are looking to be around other families. Seniors are hoping for the flexibility to travel and enjoy hobbies without the burden of home repairs. These intangibles, combined with the tighter mortgage market, have made for a strong demand for rentals over the past several years, and it’s a trend experts expect to continue.In a recent report on the multifamily market, Freddie Mac’s Steve Guggenmos said that their analysts expect the rental market to remain strong:

“It is now clear that the increase in multifamily demand is more than a temporary correction stemming from the Great Recession. Favorable demographic trends will support strong multifamily growth for several years.”

This trend, of course, is good news for PointOne Holdings. We continue to invest in our portfolio of multifamily properties and add upgrades and amenities that will appeal to a broad range of potential renters.