Over the past few years, a growing trend in the multifamily industry has been the prominence of renters from the Millennial generation. Now more than ever, millennials are looking to rent instead of buy, partly because they don’t want to be tied down by a 15-30 year mortgage on home, especially if they acquired debt from student loans. Naturally, as millennials grow older and start families they will look towards buying homes, but for now, millennials are here to stay in the renting sector.
As of last year, the U.S. Census Bureau found that millennials have overtaken baby boomers as America’s largest generation. Furthermore, earlier this year, Yardi Matrix reported millennials hit their prime renting years between 20-34 years of age, which should add roughly 2 million millennial renters to the market this year. The same report stated the amount of millennial renters will peak in 2024 with an astounding 70 million millennials looking to rent. Based on these figures, millennials should drive a heavy amount of demand to the multifamily industry for the next 7-9 years.
Not only are millennials flooding the housing market with their rent-first mindset, but they are also redefining the desired product needed to fulfill demand. Upgrading to black or stainless-steel appliances is most likely not enough to captivate the average millennial renter. From an aesthetic standpoint, millennials tend to lean towards rustic, modern designs with clean and quality materials that can provide a comfortable social experience.
They have grown up in a time of surging technological advances, so millennials look for features like a cool computer cafe/lounge with fast internet, USB wall plugins, or even light dimmers and remote-controlled fans in their units. These are just a few examples of characteristics that any generation might prefer and enjoy, but with so many options at their disposal, millennials will give their business to whoever provides the best overall experience.
From an apartment owner’s perspective, it may seem expensive catering to the millennials as a target market, but there are affordable materials and strategies that can achieve their desired product. Also, millennials are generally willing to pay the extra cash to live in a comfortable, clean, inviting space with a location that is convenient to reach work or social events. The millennial generation is, and will continue to be a large part of the multifamily market for many years to come, so it’s no surprise to see the market shifting in a new direction.