As residents move through these different stages and household types, their housing needs, preferences, income levels, and ability to afford to rent or buy a home also shifts.
Younger householders, specifically those 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 and live in a single-family home. In fact, 70% of householders between the ages of 55 and 84 own their home.
Younger millennials lived in dorms, with parents, 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. Particularly noteworthy is the fact that 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.
Both homeownership and rental options are both critically important and preferred by different types of households at different stages of life. For those with a steady income and enough assets for a down payment, owning a home can provide predictable housing costs, the likelihood of property appreciation, tax advantage (including mortgage interest and SALT deductions), and long-term stability. Rental opportunities offer flexibility for people who may not have the income or assets to qualify for a mortgage, do not want the responsibilities of homeownership or those who anticipate moving or who lack long-term job security.