Rental applicants tend to conjure up images of recent
college grads looking to start their life in the real world. But Millennials
are facing increased competition from people who have already spent decades in
adulthood, and may have better credit and higher income. Since 2005, there has
been an uptick in renters, with people in their 50s and 60s making up the
largest chunk of the increase, according to a recent report from the Harvard
Joint Center for Housing Studies.
In fact, the majority of all renters are currently 40 or
older. There are many reasons that the renter population includes a growing
number of Gen-Xers and Baby Boomers. The 2008 housing collapse that led to a
wave of foreclosures has turned some people off to homeownership, according to
Jon Spader, senior research associate at the Joint Center for Housing Studies.
He added that the tight credit market can also hinder renters from securing a
home loan.
Plus, not everyone wants to be a homeowner in their golden
years, and the decision to trade a mortgage for a lease is about a new
lifestyle, especially for empty-nesters. The amenities that come in new rental
buildings and their units are appealing to older renters. Renting also gets rid of the responsibilities
that comes with home ownership, which can become burdensome as owners age. Some
older homeowners are also cashing in on the recent rise in home prices.
But it's expensive to be a renter right now. Rents have been
on a tear recently as inventory remains tight and demand grows. That reality
that has hit home for Sharon Curry, 68, who sold her home in 2013 and started
to rent. She accepted an unsolicited offer on her home near Orange County,
California, thinking the $200,000 profit she walked away with would beef up her
nest egg. Instead, rising rent is eating up her budget. The rent for her
one-bedroom apartment started at $1,670 in 2013. She's now paying $1,962, and
she's worried it's going to continue to go up. While she is currently working,
she knows she can't count on having that income forever.
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