As millennials age towards having children, while the generationcontinues to delay home buying, family-friendly rental units willbecome more important in the future, according to anew study on family renter housing by the Urban LandInstitute, Terwilliger Center for Housing and RCLCO.

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To date, millennials and baby boomers have largely evened outdemand in the rental market, with young millennials andaging baby boomers driving most population growth—which is whyrental development has focused on singles and couples as opposed tofamily units, the report said.

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However, in the next 10-plus years, this is expected to changeas more millennials grow their families at a faster rate than babyboomers transition out of parenthood, meaning families will likelydrive more rental demand in the national housing market than theyhave in years past.

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The study found that 47.6% of millennial householdshave children, a number that is only expected to grow in the comingyears as millennials reach "peak" family age. Incomparison, 55.9% of Generation-X households had childrenduring this time, which the study said highlights the potential formillennial family growth. While there is currently a lack offamily-oriented rental housing to meet this perceived demand, thisalso presents opportunity for the real estate community.

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At the same time, homeowner rates among millennials aredeclining—40.3% of 25-34-year-olds owned a home in 2019, comparedto nearly 55% in 1980—as home prices increase, with  theaverage sale price of a home has grown from about $75,000 to$375,000 since 1980. This is creating a growing demand forall types of rental housing, but especially for millennials withgrowing families. Middle-income households faced the sharpestdecline in homeownership in the past 40 years, the study found.

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At the same time, the study found that millennials consider morefactors when it comes to purchasing a home, such asproximity to employment, convenience to entertainment, proximity toparks and recreation, availability of larger lot acreage, andaccess to public transit—all of which are slowing down thehome buying experience compared to previous generations and keepingmore people in rental units.

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Samantha Stokes

Samantha Stokes, based in New York, is a staff reporter at American Lawyer covering the business of law. You can reach her at [email protected] or on Twitter: @stokessamanthaj.