Evolution of

‘Generation Rent’:

From Millennials

to Baby Boomers

American Heritage Properties

9988 Hibert St #300, San Diego,

CA 92131

(858) 695-9400

Millennials have increasingly become known as “generation rent”,

as most young adults today shy away from the pursuit of the Great

American Dream. But as the concept of the American Dream evolves

through time as a result of economic and social factors, the people who

believe in it are also changing.

Millennials have been driving the demand for apartments for quite

some time, but recent statistics forecast that it would be the baby

boomers who will push renting market grow thin the long run. Individuals

looking for lucrative investments can find several business opportunities

in the industry.

Millennial Market Movements

Generation Y has kept a close eye on rental residential units, as

they witnessed the decline and recovery of the economy. These dwellings

matched their needs, providing just enough living space as young adults

postpone marrying and having children.

Living arrangements, however, changed from 2000 to 2007.Recent

reports from Macro Bulletin showed that the number of young adult

households renting apartments in multifamily units declined in this

period, causing a slump in multi-family construction.

Less strict mortgage credit rules and forecasts of increasing

property values enticed some millennials to jump into buying single

family homes. From 2007-2013, however, millennials backtracked and

started renting multifamily houses, amounting to half a million units.

The Market Shift

Unlike the condition of the millennial market, the demand for multifamily

rental units grew steadily among baby boomers from 2000 to 2013.

Statistics reports show the number of houses occupied by older adults

increase to 1.1 million during the period. The figures grew to 1.3 million

from 2007 to 2013.

The statistics forecasted that in the long run, older adults would

take over the renting market, pushing the growth in multifamily home

building. The analysts attributed this growth to the trend of downsizing

from single-family homes to apartments among seniors.

The Census Bureau forecasts that in the next few years, the baby

boomer generation will continue to grow; Americans aged 70 and up will

grow by more than 20 million from 2015 to 2030. During this period, the

renting market will see growth.

The “generation rent” demographics is changing, as the Great

American Dream evolves. Baby boomers—instead of millennials—will

dominate the rental market in the next years. Property investors can

benefit from this growing industry.

RESOURCES:

http://www.renthomes.com/

https://www.kansascityfed.org/~/media/files/publicat/research/macrobull

etins/mb15rappaport0623.pdf

http://money.usnews.com/money/blogs/my-money/2014/10/22/5-

reasons-more-millennials-are-renting