Rental Demographics: Age Trends
Renters aren’t getting younger — but more young people than ever are renting!
There’s a lot of data out there about who is renting, how much they’re paying, and so on — oftentimes, it’s too much, and we lose track of what we’re trying to learn about. So today, we’re going to break down some of that huge dataset and look for a couple of practical lessons within the numbers.
Here’s some digits:
- Between 2000 and 2014, the home ownership rate changed from 67% to 64%.
- In the year 2000, the average head-of-household didn’t own their own home until they were 35-39 years of age. In the year 2014, that age had advanced an entire decade — it isn’t ‘normal’ to now own your own home until ages 45-49.
- In fact, the largest decline in home ownership by age category happened in that 35-39 category, plunging from 64% to 55% over those 14 years.
- The only age category in which own homeownership rose was the 75+ category, and the only category in which it remained level was the 25- category. All of the middle categories dropped over the span examined.
Now, since the only options for a head-of-household realistically are to either own or rent, we can get information about the change in rental rates basically by subtracting 100% from the above numbers. In other words, we can look at that data and see that 35-39-year-olds rent 9% more houses today than they did 14 years ago — again (and for the same reason), the group with the biggest change.
But is that really helpful? Well, not immediately, really. Really, what we’re looking for is insight that allows us to shape our decisions about how to invest right now. Knowing the rate-of-change of a number is good for predicting what that number will look like in the future — so we know, for example, that targeting the 35-39 year old range might be a good thing to do in another few years — but let’s look at a number that’s relevant to today’s decisions.
How about this: according to that same research, the age categories that rent the largest numbers of houses are 25-, 25-29, and 30-34. Combined, they make up 38.4% of the rental market, with the 25-29-year-olds comprising 14% all by themselves. In other words, very close to 2/5ths of all renters are below 35, and just over 1 in 7 renters is 25-29.
So what properties are likely to attract the 34-and-below crowd? As is probably not surprising, the major life factors that shape these folks boil down to three: school, job, and family.
- School-oriented types are going to be on the younger end, and they’re going to be interested in a few key factors: accessibility to the school, lower rent, and tech-friendly landlords. If you can find a property on or near a major thoroughfare, put a reasonable price tag on it, and accept payment via PayPal or another method that can be used from a mobile device, you’re in a good position.
- Job-oriented types are probably slightly older, and they’re looking for easy access as well, but instead of low rent, they’re looking for another kind of accessibility as well — accessibility to social opportunities. Working all day means they’re not going to want to have to drive a half-hour to get to the nearest watering hole, so offer them either a nearby place to party, or a home with enough space to host their own.
- Younger men and women with kids either on the way or already here are looking for a place with a little bit more room — no one wants to have a baby or a child that can’t run around without being unsafe. They’re also generally more cost-conscious than the job-oriented types, but less money-restricted than the students (unless they’re a single parent.) Finally, a young parent is looking for a safe neighborhood above almost all else.
Orienting your rental purchases toward a known audience can give you a distinct leg up on the competition — and knowing where to look for that audience means knowing how to take apart the numbers. Use the age trends to your advantage, and you can even get a better RoI on your advertising dollars as well!