The millennial mindset of urban living, through the hustle and the bustle, is a large testament to the boom in recent apartment construction. Millennials have been described to enjoy the city lifestyle due to its trendy and urban vibes that it gives off. The Urban trend that many enjoy today has caused the largest increase in apartment construction in three decades. An ample amount of millennials don’t have the job security or savings to purchase a home.
From 2005 to 2014, 47 states had overall construction shifts from homes to apartments, where more apartments were built than single family homes. Last year, Apartment building made up for 35% of all home construction. In the past year, 386,000 apartments were built. States that saw some the most dramatic construction turnover rates were Colorado, California, Oregon, Arizona, New Jersey, Washington, North Dakota and Nebraska. A majority of the apartments that have been built in recent years still maintain very low vacancy rates.
This recent trend raises the question, “When is the turning point?” The Federal Home Grown Corporation, Jonathan Spader, a research associate at Harvard University, and The Federal Home Mortgage Corporation both predict for new urban apartments to continue in growth. The amount of first-time home-buyers is at its lowest in thirty years. Researchers say that first timers cannot afford the higher price homes, the increasing mortgage rates and don’t have the ability to save due to their increasing and already high rental payments. However, the millennials are more likely to rent due to the fact that their incomes are slowly rising and they want to invest in a smaller place on their own.
The method of renting and not investing for a home is not only a millennial mindset. Empty-nesters have also been renting rather than purchasing because they value the same trends and urban amenities that the millennials desire. In order to keep residents in specific areas, cities have begun to implement programs that allow them to compete with suburban living. Cities are beginning to design parks that are more secure, and creativity-based for children. However, with many aspects in life being more delayed lately such as marriage and children, younger adults have been residing in rental apartments for longer periods of time. There are beliefs that ownership is vital for a vibrant society because when one decides to own and invest in a home, they are more invested in local city structures.