Millennials Lean Toward Rentals, Compared to Baby Boomers: Report
The differences in wealth and housing preferences between baby boomers and millennials is changing the residential real estate market, with a shift to rental properties among younger people, according to real estate data provider HouseCanary.
The primary result of these differences is a shift to rental housing from homeownership among younger generations, according to the San Francisco company.
Millennials have limited personal savings, high levels of debt and slow career growth, all of which make it more difficult for them to afford to buy a home, HouseCanary said. The likelihood of rising interest rates will exacerbate the situation.
That's in contrast to the baby-boom generation, which drove rapid growth in entry-level home sales starting in the 1970s, and have continued to fuel growth in homeownership rates in each decade.
Real estate investors and developers should thus adjust their business strategies, said Jeremy Sicklick, HouseCanary's chief executive.
"Our research indicates greater opportunity for development of for-sale residential to the aging population and for-rent residential to serve the younger generation," Sicklick said in a news release.