Small Apartment Properties Experience Uptick in Young Adults Renting Alone
As apartments continue to support Millennial demand in a variety of ways, small asset multifamily is experiencing an appreciable uptick in young renters living alone across the rental market.
Apartment Buildings Mirror Millennial Independent Living
Young adults are reshaping the rental landscape, as they continue to leave their parents’ homes and take their first steps toward independent living. In 2016, while one in every three adult Americans across all age groups lived in rental units, rentership rates among Millennials¹ were significantly higher. Half of this population segment, totaling 71 million, lived across a variety of rental asset classes².
As shown below, the distribution of Millennial renters is skewed slightly toward large asset and small asset multifamily, which housed a 40% share of this segment, followed by single-family rentals at 38% and duplex-quadruplex units at 18%.
(Please click around for detailed chart information)
While these numbers are significant, Millennial renters are not a monolithic block. They spread across a variety of living arrangements, including both family and non-family households, which differ by rental property type.
As shown below, family households comprised 76% of the Millennial renter segment living in single-family rentals, underscoring the broader story of young adults continuing to live with their parents or extended family members.
(Please click around for detailed chart information)
Conversely, the share of young adults living alone in non-family households increases significantly to 47% in small asset multifamily and 53% in large asset multifamily.
Large apartment properties had a slightly higher share of Millennials either renting alone or in shared accommodations, at 21% and 32% share within this asset class, respectively.
Millennials Living Alone in Small Properties on the Rise
Young adults renting alone is less common in small apartment properties as compared to larger buildings. Yet data suggests that small multifamily buildings are becoming more popular for Millennial renters living independently.
From 2014 to 2016, the share of Millennials renting alone increased by close to 1 percentage point in small asset multifamily, which are relatively more affordable, compared to only 0.6 percentage point in large asset apartments, as shown below.
(Please click around for detailed chart information)
At the same time, rental sharing increased in large multifamily properties, while declining slightly in small properties; this is possibly due to more flexible space configurations and common amenities within larger buildings.
For multifamily stakeholders, the above trends suggest a crucial role for property positioning in appealing to specific segments of the Millennial landscape. While building-level common amenities might be appealing for those sharing rental units in large properties, the more affordable small apartment properties could provide a quieter experience for young adults seeking to live alone.
1 Millennials are defined as those born in or after 1982, and are at least 18 years old in the data year.
2 All data is sourced from the American Community Survey (ACS), unless otherwise stated. ACS statistics are sample-based estimates of the compositional profile of the total population in the given year of data collection, and include a margin of error.