Number of Older (55+) Renters Could Double by 2030
Our previous look at the demographics driving apartment demand focused primarily on younger renters — let’s now look at the other end of the age spectrum.
It’s important to remember that older Americans, particularly those between 55 to 64, are increasingly turning to apartments for their housing needs.
The share of 55- to 64-year-olds renting an apartment has increased steadily since 1990. This phenomenon has accelerated in recent years due to fallout from the financial crisis. In a recent CNBC article, reporter Kelley Holland caught up with Rofl Pendall, a director at Urban Institute and co-author of Headship and Homeownership, a research paper examining future housing demographics.
While the overall number of senior homeowners is predicted increase from 20 million to 33.7 million by 2030, the number of senior renters is expected to more than double from 5.8 million to 12.2 million.
Tighter credit standards and mortgage underwriting are part of the cause, according to Pendall.
“If you start out as a 44-year-old and you don’t have a house, it would be very difficult for you to achieve homeownership in the next 10 years with the same probability as was true 10 years ago,” he said.
Wage stagnation and rising rents are other factors at play. More money spent on rent means less that’s available to put towards a down payment. As a result, the demand for safe, affordable rental housing is expected to increase for all age cohorts.
Another trend to keep an eye on (though not one mentioned in the article) is older ‘renters by choice.’ Many Baby Boomers are choosing to downsize into urban apartments or condos after their children have flown the nest. Urban apartments — or transit oriented apartments in the suburbs — offer older renters the ability to age in place with a walkable lifestyle in close proximity to retail and entertainment venues.
Be sure to check out the full CNBC article for more figures on the changing face of American housing.