Today, we are often thinking and talking about the young, millennial generation taking over. However, the average age of renters is over 40. This shift reflects damage from the housing crash and agin population.
People thought that a renting boom was coming from young 20-something millennials who got jobs and were now entering the rental market. However, Harvard University’s Joint Center for Housing Studies found something very different: nearly 51 percent of renters are over 40. That means 22.4 million households are rented by people over 40. In 2005, this number was 16.4 million.
According to the Associated Press, the older renters are coming from the foreclosures from when the housing bubble burst. Since the 2008 financial triggered by the housing bust, there have been roughly 6 million completed foreclosures, according to CoreLogic, a property data firm.
“Middle-aged households in particular bore a big brunt of the housing crash,” said Christopher Herbert, managing director of Harvard’s Joint Center for Housing Studies.
Baby boomers entering the rental market also create a lot of demand, and so do the millennials right out of college. In the past 10 years, 9 million people have been added to the renting market. Rents increased 7 percent between 2001 and 2014 after adjusting for inflation, while incomes fell 9 percent, the report said. Many people now have to spend more than 30 percent of their income on their rent. 21.3 million, or 49 percent of all renters, spend that much to rent their home. Median rent has also risen to a price about $500 more than what most would consider not to be financially burdensome. The wealthier portion of Americans has also risen. The number of rental households earning in excess of $100,000 has risen by 1.6 million in the previous decade.
With the average age of renters being over 40, plus so many younger people getting into the market, rentals are being snapped up.
“We’ve gotten ourselves into a deep hole – and it’s not going to be easy to get out of it,” Herbert said. “We expect the affordability problem will persist.”
If you are interested in renting a home in Miami, we at RE/MAX Paradise will find the perfect place to suit all of your needs.