Thursday, March 10, 2016

Fannie Mae: "Millennials ... Are the Driving Force Behind the Recent Surge in Apartment Demand"

by Bill McBride on 3/10/2016 06:23:00 PM

From Patrick Simmons at Fannie Mae: Housing Myths, Debunked: Millennials, Not Baby Boomers, Are the Driving Force Behind the Recent Surge in Apartment Demand

By far, the most important generational driver of apartment demand growth between 2009 and 2014 was the Millennials. Millennials have been reaching adulthood and entering the housing market in large numbers in recent years. For many of these new housing market entrants, the first step in their housing careers after leaving the parental nest has been occupancy of an apartment. As can be seen from the chart at bottom-left when the 2014 button is selected, Millennials’ demand for apartments increased by millions between 2009 and 2014, far outpacing the demand growth from Boomers. In fact, the increase in Millennials’ consumption of apartments during this period was more than 10 times that of Boomers, as can be seen when the “All cohorts” button is selected.
Check out the interactive graphic.

This is related to my post earlier this week, see: Demographics: Renting vs. Owning. The huge surge in the prime rental age group is nearing the end, and over the next decade, there will be a pickup in the key 30 to 39 demographic (homebuyers).