The Age Distribution of Renters: Who Lives in Small Properties?
While the broader market’s attention has been focused on Millennials living in large, high-amenity properties, the data on the age of renters and where they reside hold some surprises.
As it turns out, the average age of residents in small buildings is significantly lower than in large buildings. The chart below shows just how big a difference there is. In small properties, the average resident age is 32. In large buildings, the average is ten years higher.
As shown in CHART 2, residents in small properties are weighted to younger age cohorts. Residents under 30 years old account for 51.6 percent of the small building population. That includes children, underscoring the importance of the small property inventory for families. In large buildings, residents under 30 years are 38.0 percent of the renter population.
At the other end of the scale, the distribution of renters in large properties is weighted to older Americans, including empty nest Baby Boomers driven to amenities and more urban locations. Renters 60 and older account for 26.8 percent of large building residents and just 11.1 percent of residents in small buildings.
The lower age profile of small buildings highlights some important features of the market. While younger households may have stronger preferences overall for large, amenity-rich, urban properties, they also have lower incomes than more established demographic cohorts in their 30s and 40s. At the same time, young families may also prefer smaller buildings because of their lower costs, but larger unit sizes, suburban location, and proximity to schools may be important factors as well.