As more millennials seek to become first-time home buyers in this immensely competitive pandemic market, many are finding that renting is the only option — even though they have the income and down payment required to make a purchase. A recent study by RentCafe found that high-earning millennials (with an annual income of more than $50,000) submitted 39 percent of all rental apartment applications in 2021, their largest share in five years.
Millennials aren’t the only ones renting more, but their share of rental applicants grew by 20 percent over a year, dwarfing the 12 percent growth among Gen Xers and the 7 percent among baby boomers meeting the same income threshold. But they’re used to it: Millennials graduated from high school in the late 2000s, just as the real estate market collapsed, then faced a tough job market and crippling student-loan debt after college. Now many are experiencing serious inflation for the first time in their adult lives.
The RentCafe study found that higher-earning millennial renters favored smaller cities (with populations under 300,000), which are often targets for first-time buyers. Among the top 15 cities ranked by growth of rental applications in the study, 11 were small; three were medium-size (population 300,000 to 600,000); and only one was large. The greatest year-over-year growth in rental applications was 83 percent, in Macon, Ga., population 153,000.
To reach its conclusions, RentCafe analyzed 5.9 million rental applications from RentGrow, Inc., spanning approximately 40,000 apartment communities. This week’s chart, based on the study, shows the 15 cities where applications by higher-earning millennials grew most.