Recently, we wrote in a blog post that Millennials are beginning to age up. The total number of people aged 20-34 will peak in 2023, and then decline over the next twelve years. As Millennials get married, have kids, etc., they will buy homes and move to the suburbs, and the number of renter occupied households could take a sharp hit, possibly resulting in higher vacancies for urban apartments. The generation immediately following Millennials isn’t big enough to back fill.
But maybe the generation in front of Millennials—Generation X—can help. While smaller than both the Millennial and Baby Boomer generations, Gen Xers represent significant potential demand, and will number over 60 million by 2028 according to PEW. As the top of this generation enters their fifties, their children have begun to head off to college. At the other end of the spectrum, Gen Xers in their mid-to-late thirties are entering into prime years for divorce. As their children head to college, or they get divorced, Gen Xers are already moving out of the suburbs and into urban areas:
A similar phenomenon with the Baby Boomers trading in their homes for urban rentals has been well documented, but the trend could be even more pronounced with Gen Xers for the simple reason that they are hipper than their forbearers. Regardless, not many people want the responsibility of owning a home unless they have a good reason for it.
Perhaps landlords and property managers should begin to develop marketing campaigns specifically for this audience segment. The good news is that those Gen Xers moving into urban locations have the incomes to afford luxury rents: