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Real EstateJun 29, 2024

More Young People Are Rejecting Homeownership for Renting, Citing Financial and Lifestyle Benefits

Institutional Capital

Noah Weidner

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The American Dream once meant owning a single-family house with a white picket fence and a fancy car out front. Today, a rising crop of young people are rejecting this tradition (buying real estate) and embracing modernity (renting real estate) instead. Contrary to what real estate gurus preach, young people say it’s because they’ll be better off doing the latter.

According to FT, a growing volume of millennials — who fled urban areas during COVID-19 — are now rejecting homeownership due to lifestyle preferences and high financial costs.
An Apartment List survey in 2022 found that nearly a quarter of millennials plan to “always rent” — a 13.3% increase from 2018.

Who’s footing the bill? In January, we calculated that the true cost of homeownership can exceed $3.5K per month for the average US homeowner. With younger people seeking amenity-rich urban areas and walkable communities, renting often becomes the only viable option. Private equity groups like Blackstone and KKR have noticed — shelling out billions to expand their apartment portfolios across the country, staking bets that renting demand will keep rising for years to come. Even WeWork’s Adam Neumann is betting on the future of apartment living with his new startup… Let’s hope it doesn’t go bankrupt this time.