Millennial Debt Contributing To Apartment Demand

Apartment demand is skyrocketing across the country, and Millennials are at the heart of the surge.

Multifamily expert Kevin Finkel, COO and president of Resource Real Estate Opportunity REIT in Philadelphia, says a huge factor in this apartment shortage is Millennial demand. Americans under the age of 30 make up roughly 50% of renters, Kevin says, and there are several factors that keep them from turning to homeownership as an option.

Take student debt, for example. The average college grad has approximately $35k in student debt. Couple that with the average median income of Millennials after graduation being $40k a year, and you can see how the disproportionate numbers would deter Generation Y from seeking homeownership until debt is paid off.

“These young have a tremendous amount of student debt,” Kevin (pictured above with family) tells Bisnow. “And this debt is proportionately higher than we’ve ever seen.”

Many Millennials are also forgoing marriage until their late 20s, which is increasing renter demand, Kevin adds. A generation ago, the average age for marriage was between 23 and 24 years old, but today Millennials are waiting until they’re 27 or 28. Add in that job tenure for Millennials is about three years, and you can see why no one’s grabbing up homes.

“This is having a huge impact on the rental market. It means we have a lot more single people for a longer period,” Kevin tells us. “You have all these Millennials and their lifestyle is changing. When moving to a new job every three years you need to be flexible. If you’re unmarried and willing to relocate, it doesn’t make sense to get a house.”

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