Are the Days of Living in the Suburbs Over?
The days of living in the suburbs are pretty much over. The younger generations prefer cities and have flooded their favorite ones in past few years. Why? Job prospects are often stated as the number one reason in many a cases. Until now, this has been the belief of most real estate agents, builders and urban planners. But is it true? It may not be according to the latest census figures.
Millennials, which are individuals belonging to the age group between 20 and 34 years, are not relocating to big cities. According to the chief economist of a reputed real estate website, the millennial population growth was greatest outside the big cities for the period between 2012 and 2013. Smaller cities, lower density cities, suburbs and lower density suburbs all had higher growth than big cities. Indeed, millennial population growth in the big cities has also risen at a pace faster than what has been observed in the past, but this pace is still slower when compared to the suburbs.
A lot of people in the younger generation have moved back in with their suburban parents but again, this isn’t a strong reason for growth. So why are we still seeing growth in big cities? Babies; millinnials with children ages 0-4 are strongly urban as per the census data. Yes, throughout the country, the number of younger children has declined, primarily because of weak economy. However, consider only the most urban areas, and you will find a rise in this number.
Babies have always been a strong reason for acquiring homeownership in the past and the current era as well. But this time, these young parents have not been able to buy a suburban home and so are relocating to the big cities.
In 2013, there were over 300,000 more individuals compared to the pre-recession levels, living with their parents even though they were in their 30s. When the job market strengthens, these individuals will consider homeownership, but before taking this step, they will turn to renting first. At least that is what most of the analysts predict.
Rents may have risen, but renting is still a preferable option. There are no requirements for a down payment and excellent credits scores are not needed by many landlords.
A recently published report has claimed that the young millennials who have just become parents are going to play a key role in a stronger housing recovery but if they can’t save up enough money for a down payment, the housing recovery might come to a standstill.