The median U.S. home sale price hit a record high in July, according to Redfin, keeping more people, especially younger Americans, in rentals. And now there’s a new generation leading the rental pack, according to a report by the Joint Center for Housing Studies of Harvard University: Generation Z.
As more millennials transition to homeownership, their numbers are dwindling in the rental market, said Daniel McCue, a senior research associate at the center and the lead author of the report, America’s Rental Housing 2024. “‘Changing of the guard’ was the story we were kind of going for,” he said.
The study defined the generations as “baby boom” (1946-65), “Gen X” (1965-79), “Millennial (1980-94) and “Gen Z” (1995-2009).
Younger generations have driven the bulk of renter household growth over the past decade, the study found. Millennial renters peaked at 16.2 million in 2019. But between 2019 and 2022, their ranks dwindled by 797,000 as their homeownership rate increased by 9 percentage points, according to the study. By 2022, Gen Z accounted for about 7.9 million renter households — more than double what they had in 2019.
The shift in generational demand has not been a surprise, said Mr. McCue — it was simply a matter of when. But while Gen Z is now driving the bulk of rentals, baby boomers are helping to “sustain longer-term rental demand,” the report found, because the generation is so much larger than any before it. Over the past five years, as the oldest boomers approach their 80s — an age when many transition back to renting — renter households headed by someone age 65 or over increased by more than 1 million.
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