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When you think of your new neighbors, you may assume that it’s a group of college students who just got out of school and are ready to start their lives as adults. But that simply isn’t the case anymore.
According to RentCafé’s latest analysis of Census data, apartment complexes are suddenly starting to attract seniors aged 55 or over, with no children in the household. Among some of the most popular reasons why? Seniors say they are looking to move to the suburbs.
This can be easily attributed to empty-nest Baby Boomers.
According to data from Harvard University’s Joint Center for Housing Studies, between 2004 and 2013, those renting increased among people aged 50 to 75, with the average renter being around 40-years-old or older.
“Lowering living expenses, looking for a different lifestyle, less house-related work and overall less responsibility can be achieved by downsizing, so a lot of retirees opt to rent.” says Simona Solomie, a real estate broker with ReMax Masters of Morton Grove, Illinois.
Baby boomers may also consider moving into a rented apartment because of the amenities and community value. The Baby Boomer generation has a deep desire to be a part of a community where people of all age groups live and engage with each other, according to Cabinet Corp.
“They prefer this over living in a community that has predominantly senior residents. Therefore, high-end apartments that offer multiple amenities that foster community relationships are a big attraction for the Boomers,” Cabinet Corp found.
Patrick Bet-David, a financial adviser and president and CEO of Woodland Hills, believes that while retiring to a rental is not the perfect choice for every senior, there are many who recognizes the benefits.
"If they have a nest egg, whatever the number might be, there is no need to hold onto that single-family home," Bet-David told MoneyRates. "I would absolutely encourage those seniors to sell their homes and take that money to either save or use as an income source."
Renting households with no children also saw a large trend increase to 33% in the suburbs and 16% in the city. This category includes couples or single householders with no children present in the household, including Baby-Boomer empty-nesters.
U.S. renters for those over 55 increased 28% between 2009 - 2015.
Nationwide, the number of senior renter households saw a 2.5 million increase, which is the largest net increase by age group.
Those younger than 34 increased by only 0.5 million in the same time frame.
In all 20 of the largest U.S. cities studied, senior renters destroyed that of younger renters.
In the same timeframe, the senior renter population grew the most and the fastest in Riverside, CA, up 63%. This was followed by Tampa, Florida, at 61%, and Phoenix, Arizona, at 59%.
However, overall, the city of Los Angeles managed to have the largest overall net increase. The city gained approximately 134,000 new senior renter households and lost 26,000 renters under the age of 34.
According to The Atlantic, the reason for the drop in millennial renters may be attributed to the record-high number of 18-to-34-year-olds still living with their parents. Analysts believe it is not because “some rich white twenty-somethings are taking a year after graduation to save money”.
On the contrary, it may be because of the black and Hispanic Millennials who didn’t get to go to college or did not finish college. They are more likely to live with their parents right now than any other time since the late 1800s.
“The decline in Millennial homeownership today is a single simple statistic masking a complex distribution of motivations,” Derek Thompson, senior editor at the Atlantic explained. “Rich, urban, college-educated, and super-mobile Millennials have elected to trade their 30s for their 20s when it comes to buying a home. Meanwhile, poorer, less-educated, and stuck minorities have often traded homes and apartments for their childhood bedroom.”
Looking at work done by New York University sociologist Patrick Sharkey, Richard Florida wrote claimed that 70% of black residents in America’s poorest and most segregated neighborhoods "are the children and grandchildren of those who lived in similar neighborhoods 40 years ago.”
To put it simply, they are stuck; so is it really a surprise that millennials are having trouble moving out into rented apartments?
So it seems that even after 10 years since the housing crisis, the housing and apartment market still continues to throw curve balls.