When it comes to trends, it’s usually young, hip things who set them. But not when it comes to the housing market. This time it’s residents 40-plus who are leading the way, and millennials who are following in their footsteps.
According to a new study from Harvard University’s Joint Center for Housing Studies, millennials are renting, but so too are their parents, so much so that there just doesn’t seem to be enough affordable rental units to go around.
Said Christopher Herbert, Managing Director of Harvard University’s Joint Center for Housing Studies, “certainly not right now there aren’t.”
“We’ve seen vacancy rates at their lowest level in decades and rents growing at their fastest pace in 30 years. With all those people looking for rentals, it’s increasing competition and making the market ever tighter.”
A co-author of the study, Herbert said the number of renters is growing. Nine million new households over the last decade, many of which are not the young college grads you might expect.
“The vast majority is among people in their 30’s and older. In fact, the biggest group is 50-69,” Herbert said.
The increase in older renters is a legacy of the housing crisis. Think of it like the gift that won’t stop giving. Consumers who lost their homes, now rent. And with all generations hoping to rent, prices are going up. Especially in cities, according to Devin O’Brien, head of strategic marketing at apartment rental website, Zumper.com.
“Oakland was up 19 percent this past year. Brooklyn, Queens, all of those areas, are all skyrocketing,” he said. “Rents, particularly in urban areas, are going up tremendously.”
But, notes Herbert, it’s not all bad. After all, renting can makes good financial sense. It can mean freedom from even more expensive mortgages or taxes.
For some though, when rental costs go up, something has to give. And for low income seniors, typically what gives is spending on food and healthcare.
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