High-Skill Millennials Attracted to Small Multifamily Price-Lifestyle Balance
- Renters employed in STEAM occupations earn 40% to 60% more than the average multifamily renter by age group.
- The income levels of Millennial multifamily renters in STEAM occupations are not far behind their older colleagues.
- The choice between small and large multifamily for high-skilled Millennials appears to be more influenced by lifestyle than personal income.
High-Skill Renters Earn Significantly More
In our previous two blogs, we examined the occupational profile of renters by age cohorts. Our findings indicate that the share of high-skill science, technology, engineering, arts/design and mathematics (STEAM) workers is growing at a significant clip across apartment properties. We also found that this group has a higher preference for large asset multifamily.
These patterns are most observable among millennials, who are driving this skew toward high-skill professions. However, they seem to have an equal preference for small and large building rental units.
In this blog, we further examine generational housing preferences by occupation and income level. According to the latest U.S. Census Bureau data, personal income levels for all workers across occupations reached nearly $40,000 in small asset multifamily, with Millennials earning around $37,000.
Unsurprisingly, high-skill STEAM renters in small asset multifamily had significantly higher personal incomes in the range of $55,000 to $62,000. This was 50% to 60% higher compared to renters across all occupations in this asset class.
High-skill workers living in large asset multifamily had the highest personal income levels across the rental market. Millennials in this group earned about $72,000, compared to $84,000 for STEAM renters of all ages.
Interestingly, incomes for STEAM millennials living in small properties were only 10% lower than the average for all renters in the asset class. The generational difference is more pronounced in other asset types, measuring 15% in large buildings and 21% in single-family rentals (SFRs).
High-Skill Millennial Incomes Similar Across Asset Types
Given that income is one of the most significant determinants for rental preference, it would make sense that higher-priced, large multifamily select for higher-income individuals. While this is broadly true for the overall labor market, millennial incomes are similar across different asset types.
A comparison of incomes across asset classes indicates that millennial STEAM renters in large asset units earned only about 23% more relative to their small building peers. This is compared to a 30% difference for the average set across all multifamily (all occupations and age cohorts).
Millennial STEAM workers’ preference for small and large multifamily, as discussed in our last blog, appears to be explained less by absolute income level differences, and more by a variety of personal preferences, including saving habits. Small asset units with more affordable rents and a wider variety of product types might be better adapted to provide that lifestyle flexibility.
Note: 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.