Characteristics of Generation Y and Its Effect on Apartment Demand via Property Management Insider

At MPF Research, we are often asked: How can the U.S. apartment market record such strong demand given that employment growth has been lukewarm and that increasing numbers of Generation Y – the key demographic for the apartment industry – are living at home with Mom and Dad?

Recent apartment demand numbers have been far above what anyone likely would have predicted during the downturn in the economy. Since 2009, the U.S. apartment sector has absorbed nearly 800,000 units on net. The last time demand proved remotely comparable over a three-and-a-half year stretch was from 1997 to 2000. The difference, though, is that the U.S. employment market was in substantially better shape back then – expanding at an average annual rate of 2.4%. Since 2009, annual employment growth hasn’t topped 1.6%. That amounts to about 1 million fewer jobs being created per year, of late. And the share of Gen Y living at home with parents has grown from 19% to 24% over the last decade, according to a recent study.

So how can apartment demand be so strong given those headwinds? There are two major demographic trends at work.

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