The Next Gen of Renters: Mom and Dad

Posted by Silvernest Team on May 23, 2019 9:52:48 AM

next-gen-renters

This is a guest post from RentCafe.com, a nationwide apartment search website.

 

America’s older population is growing at a very fast pace, and today’s demographics look substantially different than they did only a decade ago. In fact, U.S. Census data shows more than 22% of the current population is over the age of 60.

 

The overall aging of the population is not merely an outcome of the economic hardship following the 2007 Great Recession, reflected in declining birth rates, but also a result of the baby boom cohort, America’s largest living adult generation, passing age 53 in 2017. Advances in healthcare and technology have also helped to spur longevity.

 

We recently conducted an in-depth research study on renter demographics and found that, as the 60+ cohort grew bigger and faster, it also helped push the national median age from 36.7 in 2007 to 38.1 in 2017—the highest it’s ever been.

 

Taking into consideration the decline in births, as well as higher life expectancy averages, this trend will likely continue uninterrupted. But which parts of the country have contributed more to this rapid graying of America?

 

U.S. Cities with Higher Median Age Tend to Attract Retirees

The 30 cities that we identified as having the highest median ages—over 39.6 years old—are primarily popular retirement cities in Florida, California and Arizona. In fact, Florida is home to 12 of the top 30 cities with the highest median ages, with Cape Coral ranking first on the list with a median age of 47.9, followed by Hialeah with 46.5. Sunny Scottsdale ranked third with a median age of 46, suggesting Arizona’s warm days and plentiful entertainment are attractive features for retirees.

 

Check out the full list of oldest cities by median age here.

 

Renter Households Over 60 Are Up by 43%, Growing Faster Than Other Age Groups

As expected, renter householders tend to be younger, with a median age of 42 in 2017, compared to owner householders that had a median age of 56 in the same year. Moreover, the rapid aging of householders is visible throughout the 10-year period analyzed, with both renter and owner householders getting older. However, the gap between the median age of renters has been slowly closing over the last decade.

 

Households with renters age 60 and over increased by a sizeable 43% in the past decade, from 6.551 million in 2007 to 9.37 million in 2017, greatly outpacing younger age groups. While those ages 35 to 59 grew by 17% from 16.325 million to 19.111 million in the same time period, renters aged under 35 witnessed the slowest increase rate of just 7%, growing from 13.987 million to 14.898 million.

 

Stemming from a decline in homeownership, older renter households increased faster than older owner households – 43% versus 31%. In past studies, we have found that the aging U.S. population is no as longer enthusiastic about homeownership, with many seniors starting to downsize and move into rentals. As their children move out, they often find themselves alone in a big house that is costly to maintain, causing them to rethink their housing choices.

 

Austin boasts the highest 10-year percentage change in the share of older renter households

Out of the 30 most populous cities in the U.S., 16 experienced an increase of over 40% in the 60+ renter household share between 2007 and 2017. Austin experienced the highest percentage change in the share of renter households over 60 years old, increasing by 113% in the 10-year period. Phoenix had the second-highest increase  with 112%, Fort Worth ranked third with 95%.

Aging-renters-vs-owners

 

Renters over 60 in the top 30 largest U.S. cities

 

City/State

10 Year change

Share of 60+ renters

No. of 60+ renters

Austin, TX

113%

12%

24,819

Phoenix, AZ

112%

17%

40,705

Fort Worth, TX

95%

16%

20,799

Jacksonville, FL

83%

17%

26,721

Charlotte, NC

66%

13%

20,939

Dallas, TX

62%

14%

43,534

Houston, TX

61%

15%

73,366

San Antonio, TX

59%

16%

37,191

Louisville, KY

58%

20%

19,935

Denver, CO

52%

16%

23,896

Data Source: Census Bureau, ACS 2007 to 2017 1-year estimates

 

When we looked at which cities currently have the highest share of households with 60-and-over renters, New York City was on top with 27%. It’s also important to point out that New York City is the only one on our list to have more renter households that are 60 and over than those that are 34 and under. However, this might not come as an absolute surprise if we think about the city’s infamously high rents, generally unaffordable to those under 34.

 

The second highest share of 60+ renter households is claimed by Baltimore with 25%, followed by Detroit and San Francisco with 24% apiece. Not surprisingly, all 11 cities with the highest populations have over 20% shares of older renter households, including Las Vegas, Philadelphia, Boston, Chicago, Los Angeles, Louisville and Washington, D.C.

 

Click here to see the share of 60+ renters in over 300 cities.

 

By 2035, the 60+ renter share is projected to keep growing, while all other age groups decrease

According to our projection based on the trend witnessed between 2007 and 2017, we expect the year 2035 will mark a major demographic shift with the share of over-60renter households reaching somewhere around 31%, and becoming the second-highest share among all age groups. Despite being the majority, those ages 35-59 will likely see a decrease in their share of renter households, dropping from 44% in 2017 to an estimated 43% in 2035. However, the most notable decline is projected to take place among those 34 and under, with a projected decrease from 34% to 27% .

In terms of net numbers, the 60+ cohort is expected to grow to an estimated 18.6 million by 2035, and will become the second-largest group of renter households, surpassing those 34 and under.

 

This growing share of aging Americans is bound to have an impact on the U.S. real estate market. This is a population that has witnessed firsthand the impact of the 2007 housing crisis and the re-shaping of the economy, forcing a good deal of them to give up their homeowner status and move into rental apartments. It’s important for developers to acknowledge the particular housing needs of older renters and make sure that they are being met.

 

Use the table below to find out more about renter age groups in your city. Noteworthy of a mention is the fact that of the over 300 cities analyzed, 24 cities have larger numbers of senior renters over 60 years of age than young renters under 35 years of age (highlighted in green).

 

City/State

Median Age (Pop.)

Renters 60+ Share

Renters 34 to 59 Share

Renters 34 & under Share

Cape Coral, FL

47.9

29.6%

48.0%

22.5%

Hialeah, FL

46.5

32.4%

52.8%

14.8%

Scottsdale, AZ

46

24.6%

39.1%

36.3%

Pompano Beach, FL

45.5

28.6%

46.2%

25.2%

Carlsbad, CA

45.4

23.8%

56.3%

19.9%

St. Petersburg, FL

44.8

23.3%

43.2%

33.5%

Surprise, AZ

44.3

21.5%

57.0%

21.5%

Glendale, CA

43.9

34.6%

44.2%

21.2%

Thousand Oaks, CA

43.6

25.8%

47.8%

26.4%

Port St. Lucie, FL

43.3

26.4%

54.2%

19.4%

Henderson, NV

43.1

28.3%

40.6%

31.1%

Torrance, CA

42.9

16.6%

57.7%

25.7%

Huntington Beach, CA

42.8

21.4%

49.4%

29.2%

Spring Hill, FL

42.4

21.1%

56.4%

22.5%

Clearwater, FL

42.3

26.6%

48.7%

24.7%

Fort Lauderdale, FL

42.1

22.7%

47.8%

29.6%

The Woodlands, TX

41.6

15.2%

56.9%

27.8%

Centennial, CO

41

19.9%

51.8%

28.3%

Lakeland, FL

41

26.7%

41.1%

32.2%

Peoria, AZ

41

33.1%

41.3%

25.6%

Data Source: Census Bureau, ACS 2007 to 2017 1-year estimates

 

Methodology

  • This report was compiled by RentCafe.com, a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States.
  • Tenure of occupied housing units by age was obtained from Census ACS 1-year estimates for 2001-2017 at national and city level.
  • Median age by population at U.S and city level was obtained from the same sources.
  • In order to compare data, we created 3 age groups, aggregated from existing age groups and compared resulting data from 2007 & 2017.
  • For this research, we analyzed more than 300 cities with a population of over 100,000.
  • For the 2035 projection, we used data from Census – American Community Survey 1-year estimates: 2007 to 2017, Households by tenure and Age estimates. We based the projection on historical trends y-o-y from 2007 & 2017 and kept the homeownership rate at 2017 level for each age group. While the future growth in older households is confirmed by other sources, the results should be considered rough estimates and are subjected to change.

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Tags: Housing, Retirement, Finance