Demographics of Renters Are Changing
A new report by the National Association of Realtors points to an increase in the number of renters, as well as a transition in their demographics, in the United States. According to census data, 34% of households are now renting, compared to 29% five years ago. Not only are there more renters, but perhaps surprisingly, they’re not all young people just establishing their first households.
Proportionally, there are more renters in the 30- to 64-year-old age group. The economy, bursting of the housing bubble, foreclosures and job losses have all contributed to the increase in older renters. In fact, there has also been an increase in renters older than 65, both because that population itself is increasing, and because of lifestyle choices of this group. They are downsizing, traveling and many wish to be free from the responsibilities of home-ownership.
One group is missing from the new renters: the very young. Twenty-somethings are having a difficult time getting started on their own. Many are moving home after college, and waiting until they find stable employment before leasing their own apartments. In fact, five years ago, 1 million new households were formed every year; now, that number is down to 500,000.
What does this mean for landlords? Your typical tenant is changing. What works for young people might not work for a couple in their 50s. Plus, the pent-up demand could mean a very healthy rental market as the economy continues to improve. Are you ready?