The American dream has long been to own a home with a white picket fence, but the last decade might show that times, and preferences are changing.
From 2010-2019 new apartment unit deliveries totaled 2.34 million, according to data from Yardi Matrix, a commercial real estate data and research firm.
Areas where jobs are created are largely responsible for the increase in new apartments, but other factors are at play says Yardi Senior Research Analyst Tara Jeffcoat. Young people have never been strangers to college but Jeffcoat said there are more millennials staying in apartments as they delay more expensive life milestones due to burdens like student debt.
However, boomers have also turned to apartments for fewer maintenance concerns and increased access to local amenities.
“This is a growing cohort that is doing it not because they have to, but because they want to. They are really driving that discretionary renter segment,” Jeffcoat said.
Apartment deliveries have mirrored the economic expansion since 2010, reaching a peak in 2017 with 331,000 new units. The number has declined in each of the last two years, but Jeffcoat is not ringing any alarm bells.
“I don’t think it’s significant yet,” Jeffcoat said. “I think we would need to see a much sharper decline or slope of the decline before really getting worried.”
As unemployment has decreased and highly skilled labor has become more in-demand, costs of construction have risen, causing a slowdown.
To see the full Yardi Matrix report, click here.