As residents move through these different stages and household types, their housing needs and preferences also change; as well as their income and ability to afford to rent or buy a home.
As one might expect, householders under the age of 35 are generally renters of multifamily housing. Only a small share of these households owns a home. As householders age, they are more likely to own a home and live in single family home; 70% of householders between 55 and 84 own their home.
Younger millennials who were in dorms, parents’ homes, or with roommates in 2010 now occupy an estimated 408,000 homes, 66% of which are rental units. The growth of these households has been a major driver of housing demand and fully 27% of these new millennial households have incomes of $150,000 or more, putting them in a position to outbid existing lower income households for the units that are available.
Homeownership and rental opportunities are both critically important and preferred by different types of households at different points of life. For those with a steady income and enough assets for a down payment, homeownership opportunities provide predictable housing costs, increased equity as a property appreciates, tax relief in the form of the federal mortgage interest and SALT tax deductions, and excellent housing stability. Rental opportunities provide people options when they may not have the income or assets to qualify for a mortgage, they may not want the maintenance responsibility of homeownership or if they may have plans to move or lack long-term job security.