More and more, American is becoming a nation full of renters. Contrary to popular belief, it’s not all due to Millennials. Yes, people in their 20s still make a large percentage of renters, but the 40-and-over population does as well. The Harvard Joint Center for Housing Studies conduced a study that showed how the face of renters in America is changing.
Over the past decade, there’s been more or a surge in older renters than there has in Millennial renters. In the last ten years, the amount of renters under 30 years of age has gone up by approximately one million. During the same period, there were also 3 million additional Gen X renters and 4.3 million additional renters in their 50s and 60s. These changes are having an affect on the normal profile of renters.
One reason why Millennials are not renting at an increasing speed is because more and more, younger people have opted to continue living at home, particularly after the financial crisis of 2008. It’s predicted that there will be an influx of Millennial renters in the next few years.
The report also shows the different ages and demographics of people who are likely to rent. For example, the amount of families with kids that are renting has gone up by over 2 million within the last decade. Additionally, 3.3 million more people who have incomes over $50,000 are renting, including the 1.6 million people who have incomes of $100,00 or over.
For a lot of people, renting isn’t a choice. Since the housing bubble burst in 2004, nearly 8 million homes have been lost to foreclosure. The price of homes has continually risen and mortgage credit is more difficult to get. People who want to become homeowners don’t always have a way to do so, forcing them to rent.
The more people are renting, the higher rent is becoming. By the middle of 2015, as many as 43 million individuals and families were renters, which was a major increase from the just 9 million in 2005. The more demand goes up and vacancy rates go down, the higher rent becomes. Plus, most people have had either stagnant or decreasing income.
A high amount of people find it difficult to pay their rent. The report showed that almost 50% of renters in the U.S., a total of approximately 21.3 million people, spent over 30% of their incoming on housing during 2014. A quarter of them even spent 50% or more on housing.
Roman Temkin is a real estate developer who hails from NYC.