Multifamily Future More Than Millennials...
Since the end of the Great Recession, the demographic demand driver that has received the majority of focus in the multifamily industry has been the coming of age of the millennial generation. Millennials originally matched the size of the baby boomer generation, but to-day, due to immigration, the millennials have surpassed the boomers in size with almost 80 million young adults between 18 and 34 years old. The millennials have been poised to take the apartment market by storm just as the baby boomers did in the 1970s and 1980s, and the excellent multifamily results over the past seven years signify their importance.
As the millennials began renting apartments in earnest, other demographic trends that have and will underpin stronger than expected demand have been brought to light. De-layed marriage, higher educational attainment, increased diversity and pent-up household formations are emerging trends invigorating apartment demand. However, a trend not highlighted or maybe even not noticed that has had and will continue to have a signiﬁcant impact on apartment demand going forward is the rise of single households.
According to studies on ﬁrst-time homebuyers, a person is most likely to purchase his or her ﬁrst home one year before or one year after getting married. Thus, marriage can be viewed as a deﬁnitive demographic change affecting the propensity to rent. The longer a person stays single, the higher likelihood of renting. In the early 2000s, when the ﬁ rst millennials began entering adulthood, the median age for marriage stood at 26.8 years for men and 25.1 years for women. As of 2016, those numbers had increased to 29.5 years and 27.4, respectively. The increased median age for marriage has signiﬁcantly delayed households reaching the potential inﬂection point to purchase a home. Therefore, millennials are renting longer than previous generations and creating a deeper renter pool every year.