Like their baby-boomer parents before them the millennial generation appears to be starting to drive parts of the housing market. While their delay in forming households and buying homes has been the subject of much comment and research, RealtyTrac says they now appear to be impacting rentals.
The California company recently released an analysis of fair market rents and median home prices in over 500 U.S. counties. The study found that, while buying is still more affordable than renting in many parts of the country, in those markets where the millennial population has increased the most rentals are a bigger bargain.
While the definition of millennial is at rather squishy at best, RealtyTrac used a different one than most studies which peg the birthdates of that generation as occurring between the early 1980s and the first few years of this century. RealtyTrac used the years 1977 to 1992.
The company looked at 2015 fair market data from the Department of Housing and Urban Development (HUD) for both rentals and home prices in 543 counties with population over 100,000. In 473 of those counties renting a three bedroom apartment requires an average of 27 percent of the median household income in the local area while buying a median priced home of that same size requires 25 percent. The company said that buying was more affordable than renting in 68 percent of the counties analyzed, representing 57 percent of the total population in those counties.
In the 25 counties where the millennial population had increased the most between 2007 and 2013 renting that three bedroom apartment in 2015 will require 30 percent of the median income but buying will consume an average of 36 percent.
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”