Millennial Renters Giving Up On Owning A Home Amid Pandemic Struggles – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Life Insurance
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Content
    • Webinars
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
Sign in or register to be an INNsider.
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
  • Insider
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Advisor News
Newswires RSS Get our newsletter
Order Prints
February 16, 2021 Newswires No comments
Share
Share
Tweet
Email

Millennial Renters Giving Up On Owning A Home Amid Pandemic Struggles

Chicago Tribune (IL)

Laura Klauser sometimes finds herself looking at home listings online and can’t help but laugh.

“When I look at the cost of buying a place, especially on my own, it’s not doable,” said Klauser, 33, who rents an apartment in Avondale and works as a freelance makeup artist. “I’m currently in a place where I’m splitting rent with someone, so my living expenses are a lot lower.”

Klauser is among the almost 1 in 5 millennial renters who believe they will never own a home, according to a recent report from ApartmentList.com. Up from 12% a year ago, 18% of U.S. renters ages 24 to 39 said they expect they will always rent, and 74% of those renters said it’s because they cannot afford to buy a home.

Some attribute the rise to the COVID-19 pandemic and its impact on housing. With ongoing moratoriums on evictions, a surge in home sales and falling rents, the volatility of a rapidly shifting market have some millennials questioning the need for such a life-altering financial investment.

“I don’t want to be financially tied to something, just in case,” said South Shore resident Kelly Williams, 36. “I worry about things like that, sometimes probably more than I should. For now, this feels safe.”

Millennials are infamously saddled with student debt and have little savings. As the generation that came of age during the Great Recession and the housing market crash, millennials might see the notion of owning a home as riskier than it was for older cohorts.

“I have friends that are paying (the equivalent of) a mortgage in student loan debt or paying their rent in student loan debt,” Williams said. “How can they even think about buying a place and saving up enough money to put down a payment?”

Compared with almost 48% of millennials owning a home in 2020, 78.8% of baby boomers owned homes last year — the highest generational homeownership rate, according to the ApartmentList survey.

The silent generation, comprised of retirees mostly in their late 70s and 80s, dropped to 77.8%, as some sold their homes in favor of group living or moving in with family. Within Generation X, which includes adults between 40 and 55, almost 7 in 10 own homes.

By the time they reach 30 years old, 42% of millennials have bought a home, compared with 48% of Gen Xers and 51% of boomers at the same age.

The generational divide is greater for Black millennials, only 20% of whom owned homes in 2020. White millennial homeownership in the U.S. stood at 51%, while older Hispanic millennials are actually achieving homeownership at a higher rate than previous generations as they approach their 40s. Asians in their late 30s continue to lag behind older generations, but those in their early 30s are slightly ahead of their boomer counterparts.

Millennials have begun to close the gap, with half of new mortgages going to millennial buyers. But 4 in 10 of those surveyed by ApartmentList.com said the COVID-19 pandemic had a direct impact on their plans for homeownership, delaying or putting into question their search for a home.

Home prices have risen during the pandemic as shrinking housing inventory matched by high demand means homes are selling faster — and often above the asking price. Meanwhile, millennials have been hit particularly hard financially during the pandemic, with a higher rate of job loss and longer stretches of unemployment.

And the report does not express much enthusiasm for the notion that Generation Z — those 23 and younger — will reverse the trend.

“The economic inequalities that contribute to low millennial homeownership are strengthening, not weakening,” the report concludes.

Meanwhile, renting remains, for many, an easier option. Millennials and those in Generation Z have kept rent demand high, said Ben Creamer, founder and managing broker of Downtown Apartment Company.

“They are a generation that doesn’t mind renting because they like the flexibility it offers,” Creamer said. “And they are also fine with waiting to buy a home until they can afford the lifestyle they want.”

Rent prices have been falling during the pandemic, which means renters can afford larger apartments or buildings with nicer amenities, Creamer said.

Chicago is among the most affordable U.S. cities for renters, according to a January study by ApartmentGuide.com. The study looked at how many two-bedroom apartments were available in 2020 for below-average rent, and Chicago placed No. 24 behind cities including Toledo, Ohio; Plano, Texas; Lexington, Kentucky; Denver; St. Paul, Minnesota; San Diego; and Los Angeles.

Using data from ApartmentGuide.com and Rent.com’s listing inventory, the study found average rent for a two-bedroom apartment in Chicago was $3,102, and that 63% of available two-bedroom apartments were priced below that, said Brian Carberry, ApartmentGuide.com managing editor.

In Long Beach, California — the No. 1 city on the list — 93% of two-bedroom apartments were listed for below-average rent. Conversely, ApartmentGuide.com ranked Wichita, Kansas, as having the least affordable apartments in the U.S., with only 16% of apartments offered below its average rent.

Rents in Chicago dropped 4% in 2020, Carberry said. He believes there will be a rebound in rent prices, but eviction moratoriums and housing regulations prompted by the pandemic make it impossible to forecast when that might be.

In January, which is typically an indicator for how the spring market will perform, lease signings jumped by 25% compared with January 2020, Carberry said.

“Renters who were considering moving out of the city can now upgrade their living space without increasing their costs,” he said. “Concessions, which can range from two to four months of free rent, are no doubt contributing to the surge in demand for apartments in the city.”

The uncertainty and shock of COVID-19 could make millennials leery of ever committing to a home purchase, Creamer said. The flexibility of renting and incentives offered by large rental properties also keep it an attractive option.

“About 50% of our clients right now are upsizing their leases with either larger units or longer leases,” Creamer said. “When you add in other perks like free parking, reimbursement of moving expenses or gift card bonuses, renting looks pretty attractive right now.”

[email protected]

Join our Chicago Dream Homes Facebook group for more luxury listings and real estate news.

___

(c)2021 the Chicago Tribune

Visit the Chicago Tribune at www.chicagotribune.com

Distributed by Tribune Content Agency, LLC.

Older

Illness Insurance Market Overview : Business Growth 2026 with Top Key Players AIG, Colonial Life Insurance, Mutual of Omaha

Newer

Insurance Agency Management Solutions Market to Witness Massive Growth by Vertafore, HawkSoft, Xdimensional Tech

Advisor News

  • Banks announce dividend plansTruist, Wells Fargo, Bank of America announce dividend hike plans
  • Jerry Shenk: Social Security demagoguery
  • Rick Kahler: My state flunked financial literacy. How about yours?
  • Inflation affects each family differently
  • With retirement balances down, a Roth conversion may make sense
More Advisor News

Annuity News

  • Sammons names Kevin Mechtley to newly created product innovation role
  • Athene completes pension group annuity deal with Lockheed Martin
  • Integrity expands annuity, life insurance distribution with Annuity Agents Alliance
  • Nationwide increases roll-up rate, payout percentage on L.inc+ suite
  • Midland Retirement Distributors launches Summit Focus 3
More Annuity News

Health/Employee Benefits News

  • How will Roe v. Wade reversal impact employee health plans?
  • Jury still out on new insurance plan for Idaho schools
  • Citadel reaches $7.85M settlement over switching patients to boost Medicare payments
  • Idaho gave schools millions to buy state health insurance, but many still can’t
  • Colorado one step closer to a state-designed health insurance plan
More Health/Employee Benefits News

Life Insurance

  • Wisconsin seeks policyholders of insolvent Time Insurance Co. products
  • 4 things to know about the return of premium life insurance
  • Murdaugh, Curtis Smith hit with new SC grand jury indictments
  • Foresters Financial boosts UL crediting rate to 4.75%
  • Protective Life releases 2021 sustainability report
More Life Insurance

- Presented By -

Product Alerts by INN
Brought to you by TSR

Protect Your Clients

Discover how you can find out which life insurance and annuity carriers actually have the financial strength to back their promises to your clients long into the future.

Financial engineering and reinsurance “sleight-of-hand” are prevalent in the insurance industry today. And this risky behavior could be reducing the reserves held to protect your clients.

The TSR Ratio exposes these troubling levels of risk on some stock and private equity owned insurers’ balance sheets. And right now, you can get access to an exclusive report…

Continue reading

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

FEATURED OFFERS

It’s time for John Hancock Insurance See how our cutting-edge solutions can help you grow your life insurance business. Get to know us.

Press ReleasesAll press releases

  • iPipeline® Provides Advisors Excel with Unified Path Toward Accessing Core Data Analytics in Financial Services
  • iPipeline® Adds Speed of Underwriting to Quote Engine with Ethos to Deliver Insurance to Agents in Minutes
  • National Life Will Host Annual Investor Call
  • RFP #T01622
  • OneAmerica Commits $1 Million Toward Financial Literacy
Add your Press Release >

Topics

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Content
  • Webinars
  • Monthly Focus

Top Sections

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2022 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your INNsider Account

Not registered? Become an INNsider.