Rent or buy? That’s the question. In past generations, buying a house was the dream for many 25 – 40-year-olds. But today, millennials are increasingly turning to rent instead. This major shift in home-buying behavior is a multifaceted issue that goes beyond high home prices and limited housing supply. Many millennials, either by necessity or choice, are living a different type of lifestyle than their parents or grandparents.
Let’s explore the reasons renting is becoming a lifestyle choice for so many.
Why are millennials choosing to rent instead of buy homes?
Millennials are feeling less pressure to settle down, or just plain settle, than previous generations. More millennials are renting because:
They are having fewer kids
Birth rates have been steadily declining for years, making buying a family home and putting down roots less necessary. The Centers for Disease Control and Prevention (CDC) reports that births in the United States in 2020 were down 4% from 2019, making 2020 the sixth consecutive year of declining births. Childless millennials don’t need the stability that staying in one community for years provides, which makes saving for a house less desirable.
They don’t want to be tied down
It may seem unfathomable, but older generations tended to stay longer in a job, sometimes for life. Now, thanks in part to the pandemic, millennials are increasingly working online doing different types of gig jobs, engaging in what’s known as “polywork.” This work can be done from anywhere. Some millennials don’t want to be tied down with debt, while others want a fulfilling lifestyle over a career. By renting, they are freer to travel or experience living in new places.
They want convenience and amenities
Renters are used to having certain amenities available to them that they might not get in something they can afford to buy in today’s buyers market. Amenities important to this group include:
- Wifi-enabled communities
- Smart home technologies such as smart locks and lighting and automated window treatments
- A package management service such as a package room or locker
- Lounge area for coworking and socializing
- A gym or room that can function as a fitness studio
- Modern decors such as upgraded countertops and light fixtures
- Storage space and walk-in closets
- Virtual online tours of the property
- Rooftop deck
- Pet-friendly facility
- Community garden
They want to preview different lifestyles
Many millennials who aren’t tied to one spot with a house like to move to new places and try new experiences and different types of living. They might live in an urban apartment for a while and then move to a country farmhouse. And even though they aren’t necessarily in the market for a home now, they might try renting suburban homes in different neighborhoods to determine if that’s the right choice for them later.
They want the nomad life
Without the commitment of a family or house, some are embracing a nomadic lifestyle where each day brings a new adventure. Sometimes the nomad life involves living on the road, but other times, nomads settle down in a spot for a month or more. When they do, they usually rent.
Are millennials the only demographic preferring rentals?
Nope. Older adults in their retirement are also preferring rentals for the same reasons as millennials. Rather than aging in place at home, some seniors are downsizing and using the profits to live life to the fullest. Moving to a warmer climate or a seniors community, or leaving the suburbs for a walkable, urban environment are popular options.
Here are some features seniors look for:
They want low maintenance
Owning a house comes with regular repair and maintenance jobs that homeowners either do themselves or hire professionals to do. Renting takes that job off people’s plates, allowing them to focus their time and money on other things.
They want flexibility
Like the nomadic millennials, seniors who rent can travel anytime they like, for as long as they like, without needing to make care arrangements for a house. (A vacant house for a long period can invite trouble, such as squatters or plumbing problems.) They might have family members spread across the country (or world) or just have a desire to travel.
They want accessible amenities
Seniors both desire and require certain amenities they might not be able to have as homeowners. Amenities many seniors need include the following:
- Modern furnishings that are easy to clean and maintain
- Security camera
- Smart thermostat
- Bathroom grab bars
- Anti-slip floor in the shower
- Good lighting
- Lever door handles
- Pet-friendly
If the property is in a building:
- Elevator
- Security guard
- Common areas for socializing
- Exercise area and/or pool
- Café
- Dog park and/or grooming facility
More demand for rentals
The demand for renting over buying continues to grow. Homeownership peaked between 2004 and 2007, with nearly 70% of Americans owning a home. Today, the homeownership rate has dropped to 65%, according to the U.S. Census Bureau. There will always be people who want or need to rent, and now, an increasing amount of people, especially millennials and seniors, are choosing to rent as a lifestyle.
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