Spring and summer are a big time for moving, as the school year ends and the weather warms up, and this year apartments are in higher demand. A report from data analytics firm RealPage says move-ins in the past few months reached a five-year high. When demand grows, so do prices, and the report found that rents are up 3% on average compared to a year ago. That’s despite an overall decline in renters over the past few years.
In surveys taken ten years ago, Millennials used to say that they would never want to live in the suburbs, and they initially showed little interest in getting married and starting families. Following the housing crash, millions of them moved in with their parents, further slowing household formations.
Generation Y used to be a small part of the housing market, but now the Millennials account for more than one-third of all home purchases. Data from the National Association of Realtors shows that “older Millennials,” those born between 1980 and 1989, by themselves account for 26% of all home purchases. The older Millennials, now in their thirties, have started having children and are showing an increasing desire to own a home. And sometimes, those homes are in (shudder) the suburbs!
The transition of this generation, 80 million strong, out of their parents’ basements and into family life and home ownership is a major factor driving overall demand for new homes nationwide.
Growth in the number of households had been as low as 534,000 back in 2009, during the recession, but now it is again well over 1 million. The various sources of data on household formations show that we are now up to somewhere between 1.2 million and 1.5 million per year.
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