NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) today released a research report: Generational Gap Does Not Divide Living Preferences.
Demographics and living preferences are shaping the multifamily sector. According to the U.S. Census Bureau, the number of millennials (75.4 million) surpassed baby boomers (74.9 million) in 2015. As the largest generation, millennials will be a major force in future housing demand. Lifestyle choices among both groups, however, will ultimately determine living accommodations, with multifamily most likely to be the prime beneficiary.
Millennials have been delaying marriages and child births. According to a Gallup poll, 27% of millennials are currently married compared with 48% of baby boomers that were married at the same age based on U.S. Census Bureau data. Those that are seeking to purchase a home however may face obstacles, including more stringent lending requirements. According to Experian, millennials have the lowest average credit score of all the generational cohorts. Financial and credit issues, as well as lifestyle preferences are leading millennials to multifamily.
Baby boomers, on the other hand, do not want to be tied down to larger, underutilized suburban homes as they age. As a result, they are downsizing to smaller rental quarters. Baby boomers also want the flexibility that a multifamily rental can provide so they can pick up and move to be near their children and grandchildren. For the baby boomers that may want to give up their white picket fence for a high rise apartment, taller buildings with more amenities are available in the city.
To meet different lifestyle preferences, micro unit apartment buildings are on the rise. The first NYC apartment building with only micro-units opened last year on the east side of Manhattan. Micro unit buildings are also being built in secondary markets including Austin and Phoenix.
Although age may be the great divide between millennials and baby boomers, housing preferences at present are not.
To view the report, please click here.
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