The housing and retail markets constantly face waves of change; however, one generation in particular has become an increasingly influential force in the rental market: millennials.
Characterized as persons reaching young adulthood in the early 21st century, this innovative and constantly evolving generation has clearly made impacts to social media, technology, politics, business and real estate.
Challenging traditional customs, millennials have issued in an era with a greater number of renters than owners. As more and more millennials choose to enter the workforce and begin families, the cost of living continues to increase as well. While more people are attaining higher education and steady careers, the price tag on home ownership surges above the median salaries of millennials. Even though more millennials are pursuing higher education, more debt brought on by student loans prevents these aspiring individuals to seek out financially large commitments such as home ownership.
Many choose to find the best deal and most affordable option given their needs, desires, and realistic position. Sometimes the best value can be found in multi-family housing units — an increasingly popular choice as of late — or in single-family homes. Rented out at a low cost within older suburban neighborhoods, these single-family houses pose as a highly desirable option at an average of $1,030/month. With this low cost for room and board, millennials can afford to live comfortably with extra money for other necessities.
When examining the nation as a whole, there is a general trend of popularity surrounding growing neighborhoods on the West Coast, South, and East regions. Cities majorly affected and thriving include Portland, Philadelphia, and Miami.
Generally speaking, these millennial renters populate low-density neighborhoods outside of major cities, rather than occupying small apartments in the city’s downtown — a fantasized and popular picture painted in many sit-com TV shows aired decades ago.
Now, millennials focus their time and money toward environmentally conscious efforts. Grocery shopping at stores like Trader Joe’s and Whole Foods, many choose to purchase organic foods and opt for a healthier eating lifestyle, such as vegan and gluten-free diets. Greater awareness and attention surrounds environmentally safe products like reusable bags and water bottles and compostable goods. This shift toward investing in the environment emphasizes a different mindset and values for millennials within these progressive neighborhoods.
All aspects considered, millennials have impacted the real estate norm for the present and the future. Retail and real estate professionals must face this evolving market fully aware of the causes and effects of millennial’s spending habits and trends. Analyzing geographic and quantitative data will help many adjust to developments within the business as millennials continue to impact the market.