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Foreign welcome. It's episode number 94 of the rent Roll, your podcast on all things rental housing, apartments, single family rentals and Build to Rent. Got a fun one for you. This week we have, back by popular demand, Mr. Chris Porter, the OG of housing demographers, the guy who literally wrote the book on housing demographics and he co authored a book with his boss, John Burns. And so we had him on the podcast about a year ago and it was one of our most streamed episodes of 2025. So he's back by popular demand. We'll talk about how renter demographics are evolving over this past year, how immigration policy may be impacting rental housing demand, what to make of the increased number of young adults living with mom and dad. Again, some of you remember that number is actually going down from 2020 to 2024, starting to go back up again. And that has some real implications for rental housing demand. And a lot more hot topics, all grounded in data. So it's going to be good. You know, everything with Chris is always grounded in data. So he makes it. Makes it. You know, he's one of the one somebody I listen to, I always learn something from, from this guy. And before we jump into the conversation with Chris, I'm also going to share with you some highlights from the burns team summer 2026 housing demographics report. It's more than 100 pages long. I'm going to share with you though five charts that really stand out to me and that'll include some good mythbusters. There's always a lot of myth busting when it comes to housing demographics and housing data, rental housing in particular. Myth busting is fun. One of my favorite things to do. So we'll get into some of that, too. We also got a busy week of headlines to cover and this week's in the news section. So let's get rolling. And first and foremost, big shout out to jpi, our headline sponsor. JPI is a leading apartment developer that stated purpose to transform building, enhance communities and improve lives. Check them out@jpi.com as you know, JPI is in the cutting edge of some really exciting innovations and an industry that really hasn't seen much in the way of efficiency gains in the last few decades. That's starting to change because of things like what JPI is doing. And also big shout to Madera Residential as well as to my friends at funnel, the AI and CRM platform you can find@funnelleleasing.com okay, so as promised, before we get into our conversation today with Chris, we're going to tee it up with a little section we call Here's a chart. And I'll be sharing five of my favorite charts from our latest Burns report on housing demographics. This segment will be sponsored by my friends at Hawthorne Residential Partners, a vertically integrated multifamily owner operator and third party services provider with 60,000 units across the Sun Belt. Hawthorne has acquired or developed more than 26,000 units, has been named the number one property manager in the US for online reputation by J. Turner Research for the past four consecutive years. To learn more about Hawthorne's management services and investment partnership opportunities, visit HRP living.com All right, so five charts, housing demographics. Good stuff here. Okay. All these charts, by the way, come from my friends at John Burns Research and Consulting. Chart number one. This chart shows household formation in the US Broken down between renters and homebuyers. And it shows us that, you know, given where we are with mortgage rates and home prices and some of these delayed home buying trends, we're adding a lot more renters on net than we are homebuyers. And so sometimes, you know, I talk to people all the time, especially in the leasing side. You think, oh, there's not any demand in the market. There is demand. I've told that through COSTAR data and realpage data, yardy data. And people are still skeptical. Well, the census data analyzed by John Burns tells us the same thing in the last 12 months. This is through Q1 26, by the way, since day is always a little more lag than the private sector data guys, they're showing that we added about 680,000 renter households and that's 56% of the total. That's a lot of the total households being added in last year. So for anyone skeptical again about those big absorption numbers in the apartment side, we've seen from the private sector data providers, well, again, it's backed up by other data like the Burns data from the census as well. And that leads me to chart number two. So those big renter household formation numbers. Well, what's really interesting about this, and I've talked about this previously when I mentioned when I kind of dissected the demand numbers for apartments there, we're seeing this great renter household formation, maybe not called great. I'll call it very solid, strong renter household formation data despite a really big headwind. And that's this one. The share of young adults living with parents is going up and up and up. And I mentioned this at the beginning of the program, it's been going it did go down from 2020 to 2024 and ironically that's when rent inflation was a lot hotter. But it shot up again in 2025 and, and into 2026. And this is specifically about adults ages 25 to 34. Historically from 1997 to 2025, the long term average is about 13% of adults 25 to 34 living with parents. Today it's 18.8%. And so, you know, do some quick math there. That's a swing of more than 500 basis points or 5 percentage points, 5.2 I believe. And that's something like I think 900,000 additional young adults living with parents versus a few years ago. So we're going to talk with Chris later about the implications of this and the drivers of this, what it means for apartments, single family rentals and builds rent. But I just want to make this point again. I think it's just really remarkable that we're seeing as much renter household formation as we are, despite the fact that one of the biggest drivers of renter household formation, which is, you know, young adults aging into independence, is actually been a headwind of late now. And I think if another way to look at this is that this is also a lot of pent up demand. You know, many people living mom and dad are eventually going to go off to live on their own and renting is likely to be the first stop to independence for many of them at this stage of life. And one last comment on this. Some people say, well of course people are renting more than because they can't buy. Well, remember, just because it's harder to buy a house, that doesn't create more renter households. Now it does impact the back end, the retention that impacts obviously the net number, but it doesn't create new renter households, meaning people typically go from renting then to buying. And so what's happening here is that while sure the net number is influenced by fewer people moving out to buy a house, we still saw 680,000 net new renter households. And the vast majority of those have the new heel coming in. It's not that they were necessarily looking at owning versus renting. Chart number three. This is related. I've shown versions of this chart many times in the past. And here's the latest version of it from John Burns. It's the share of 30 year olds who live on their own, have been married, live with a kid or own a house. And it's been trending down since the early 1980s. Back in 1985, 83% of 30 year olds lived on their own. Today it's 67% from 83% total to 67%. Okay, so that's a big swing. And marriage rates have come down even faster for 30 year olds, kids and homeownership, those are down 2. And so again I say this all the time. What's happening is we, we are elongating the renter stage of life. And I love this chart because it reminds us that this is not a new trend. There's a, there's a lot of nowism in housing analysis and the news headlines and whatnot. It's like, oh, because mortgage rates are high, because home prices are high, because the economy is bad, or whatever you want, pick whatever narrative you want. There's that, that's all nowism and housing analysis tracing every trend back to the story du jour. But this trend of delayed adulthood or whatever you want it, prolonged adolescence or whatever you want to call it, it extends through different economic cycles, up and down, going back 40 years through good economies and bad economies, good job markets, bad job markets, people have been waiting longer to get married, have kids, buy a house. And burns data by the way, shows us that even as incomes have gone up, even adjusting for inflation, they, this is still happening. So just blame whatever factor you want. Like there's other factors, sociodemographic factors at play here as well. All right, chart number four, another hot topic. This is about immigration specifically. Where do recent immigrants tend to live when they come into the US And Burns break this down from recent immigrants coming from what they call high encounter countries, which is largely going to be, you know, lat Central and South America. And I think this is a very powerful chart because it shows that most recent immigrants from that part of the world, they're not living in large apartment buildings or class A build to rent communities. Instead they tend to live in smaller, older, cheaper, multifamily properties. In fact, burns data from the census shows us that 70% of recent immigrants from hind counter countries live in sub 50 unit apartment buildings, apartment properties. And, and we know that that's sub institutional. Those buildings with, we don't build a small up front buildings anymore. These tend to be older buildings, lower priced and sub institutional. And so I get asked all the time about the impact of immigration policy on rental housing demand. And I'll often point out that while it's obviously a major issue at a macro level, it's not an evenly distributed systematic issue across the board, meaning it tends to be a factor in specific types of lower cost housing. And in certain neighborhoods, and not even just Sunbelt, I mean, all across the country we know there's certain types of neighborhoods, certain types of housing units that are going to appeal to that demographic. And so if lower, lower immigration continues, that could be a real challenge for I think, the class C and the sub institutional rental market. But probably almost, I don't want to say a total non factor, but almost a non factor in the class A and B plus market, at least I should say a direct factor. There could be indirect fact impacts for sure, but in terms of the direct demand drivers from that group, it's not as much of a factor at all in the class A B plus market. All right, chart number five, last one for you today. This is the Burns forecast for rental housing demand over the next decade. And here's what's really interesting and maybe even surprising. And if you're fishing for some positive signs, the demand side, you're going to like this one for sure. So you know, if you go back a little bit, 21, 24, 25, you know how robust these housing demand numbers have been. Rental housing demand, apartments especially. Well, Burns expects the next five years to be almost as strong with 480,000 units absorbed. In terms of total rentals, it's SFR and apartments. And that's a big number in terms of, you know, net new household formation, I should say not, not absorption, net new household formation, that's a big number. So it's not quite as high as the 540k from 21 to 25, but it's still quite, quite high. And it's, it's, it's m. Then you go further into the 2000 and 30s. They do show a moderating pace from 2030, I'm sorry, from 2031 to 35, still positive, but moderating down to about 270,000. So obviously there are some valid questions about the resiliency of rental demand long term. And the further you go out, obviously the harder it is to, to, to forecast these numbers. But again, if you're looking for positive signs, especially the next five years, that's good, good, that's a good number. And by the way, I think I misspoke when I said the 408,000 units absorbed. That's an annual average over the next five years. That's a big number again. And then a 270,000 units absorbed, average renter households average added in the early2030s annually. All right, so that's it for the charts on housing demographics, my friends. At John Burns. I do want to just briefly mention a couple other observations from the Burns housing demographics report from this summer. First thing is we've been talking a long time about the growth number of senior adults. Obviously it's in a big driver for all types of housing. But the Burns team points out that there's going to be a little bit of a shift here. For a long time we were talking about boomers is kind of thinking about people who are 60 or 65 plus for the next 10 years. You know, that group ages up. It's not so much about the 60 somethings anymore, but that growth is now coming from the 75 and up category as boomers keep aging. And so that could certainly have some interesting implications. Second thing, immigration. It's not we talked about earlier about, you know, kind of broad immigration from high encounter countries, but it's not just about border crossings. Burns analysis of government data shows that we also saw a lot fewer students coming over on student visas that was down 7% last year versus the year before. And that obviously could have a real impact on on housing demand across the board. Especially rental housing of course is but again it's not necessarily systemic but in certain pockets and I've talked about this previously, we've seen a place like Boston with lots of universities. They've historically relied on a lot of, you know, students coming from a lot of international students. And we've heard anecdotally reports about fewer national students coming into these schools and therefore creating some issues for the rental housing market as well. Not even just pure student housing, but could be market rate housing that caters to the student market. Okay, so a lot more to come on housing demographics with Chris and we'll break down what all this means for apartments, Singaporean rentals and build to rent. But next up, it's time for rental housing trivia. Rental housing trivia is presented by my friends at Authentic. If you're an owner, asset manager or developer running multifamily, here's the truth about leasing in 2026. A couple of ILS accounts and cross fingers won't get you to stabilization. The the properties that are winning are running a tight ship across paid search and social retargeting, email and SMS nurture. All coordinated and with one accountable team. Authentic built that system. They call it demand to door and it's one platform, one partner, one monthly number that scales to your velocity targets. Pod listeners get 50% off setup fees for a limited time. Head to auth ff.comd2d to see how it works. Okay. Today's question among large MSAs, which one led the nation for domestic migration rate in 2025 according to John Burns research and Consulting data? And we're defined, Burns defines this as domestic move ins minus move outs as a share of total moves in that market as a way of kind of making it size adjusted, not just for skewing toward the, the biggest markets. And so but we're going to, we're going to focus on large MSAs. But this is a, this is a rate, not an absolute number. So which one led the nation? 25. Is it Austin, Charlotte, Jacksonville, Nashville, or Raleigh? So which of those five had the highest domestic migration rate in 2025? You have some thought and we'll answer it in a bit. But next it's time for Good Question Foreign. This segment is sponsored by the Kirkland Company, celebrating 20 years of helping investors source and sell multifamily assets tailored to their investment strategy. This week's feature department listing is the Hub, a 936 unit class a master planned community spanning 63 acres in Bowling Green, Kentucky. Built between 2020 and 2026 across three phases and now fully stabilized, the Hub is one of Kentucky's premier multifamily assets. Bowling Green's population has grown 9.5% over the past five years and the property sits within a trade area boasting an average household income exceeding $102,000, according to my friends at the Kirkland company. So to learn more about the Hub and other investment opportunities, Visit. We sell apartments.com the Kirkland Company. We sell apartments and all data information from this comes from my friends at the Kirkland Company. Okay, so today's good question is, Jay, you talk a lot about incomes growing faster than rents, but what about real wages? Adjusted for inflation, wages aren't keeping up. All right, so I've been talking a lot about affordability of late, and every time I do, inevitably there's gonna be somebody who's gonna bring this up. And I usually say, look, wages are growing faster than rents, especially for new lease rents. That improves affordability and particularly for the class A and B market, I think it's more challenging in the lower end of the market where rents are lower, but so are incomes. But then I'll get people saying, hey, you know what real way to tell a different story? Well, it's a fair question, but I want to give you two quick thoughts on why I don't put too much stock into that. Number one, we see this in the data from every data source I'VE seen on investment grade rental housing apartments, SFR rent in your ratio is going down. The REITs are seeing it. Real page data shows it, others do too. So it's not speculation like that's what's happening, people actually signing leases. And so I always tell people like be careful taking like broad data sets from you know, national data covering all types of households. Like let's look at who's actually signing leases. Those rent to income ratios are going down. Second point, most time people talk about real wages versus rents, they're using CPI to measure rent. And I hate to say it, but the CPI rent data is garbage. And I don't want to go too far down the rabbit hole here. I've talked about this in the past. We did, you know, rental inflation stuff. But it's a small sample survey, about 7,000 people a month each surveyed once, only six, once every six months. And it's heavily modeled and in my view it's over engineered so it tends to lag. Reality tends to be smoother than reality. And so why would you use that? We have better more real time data from sources like Costar, RealPage, Yardy, et cetera. So again, especially for the class A and B market. And then I guess one more point I want to make here really quickly is that you know, Burns data shows inflation adjusted wages for today's young adults is actually higher than than any previous generation. And that's a real stat and it's good news. But I think most people have no idea how, how true that is. And so you know, it doesn't necessarily mean that today's generation has more available cash to spend. They could be spending it differently but or could have different priorities. Like for example if you're spending a bunch of money on doordash, you're going to spend more money on food. But in terms of cpi, I'm sorry inflation adjusted wages, they are higher and that that should account for all these costs all else being equal. You know again that, that today's generation younger generation does make more than previous generations. Now all that said, is there some affordability channels out there? Absolutely, of course, especially low end of the market. But I generally see it as more of a tailwind for the A and B market. All right, next up, it's time for in the news. This segment is sponsored by Telecloud. Increasing noi is a priority. Your telecom contracts may be one of the easiest opportunities in your portfolio. Telecloud helps multifamily asset managers consolidate Internet voice and dial tone across properties the average cost reduction is 40% and it's often higher than that. To make it easy, they'll start with a free telecom audit to show you exactly where sevens exist before you make a move. Learn more@telecloud multisite.com okay, so we got a little bit of a busy week for news headlines here. I want to start with a really interesting research paper here. I know some of you may be yawning and fast forwarding her research paper, but bear with me and you'll, you might, you might be I'm going to tell you right now there's actually two things I'm going to share about research tapers, but I this is going to be good. Okay. You're going to this, you're going to find this interesting. And it ties into the first one, ties into housing demographics. It says it's a report from research paper from the Federal Reserve bank of Minneapolis and they do a lot of good housing research, by the way. And it says new homeownership measure puts people first. First. And it's an alternative way of calculating the homeownership rate tells us how many individuals own their homes, something that most commonly used metrics fall fail to track. So okay, so in English, here's what it shows. It points out that today's homeownership rate, it's actually high and higher than most people think. It's higher than the historical average. And that is a bit of a narrative buster because that's what's happening. But what gives? I mean, we know it's harder and harder to buy houses these days. We know fewer renters moving out to buy a house. If you and so why isn't the homeownership rate reflecting that? And the Minneapolis Fed argues that we may be measuring homeownership in the wrong way. The official census measure of homeownership essentially looks at what percentage of housing units is owned by an owner occupant and lived in by an owner occupant versus a renter. That's how you get to about 65%. But the Fed here argues that it could be a flawed measure. And why? Because we talked about young adults living with parents earlier. Well, if you're in a situation like that or other similar scenarios with multi generational households, you don't count toward the homeownership rate. You aren't a renter either, by the way. You're not even in the data. That's why today's homeownership rate of 65% is higher than you might assume. And so the Minneapolis Fed, they wrote this paper proposing a new gauge for homeownership, measuring the percentage of adults who are homeowners and thereby capturing this live with parents effectively. And by this measure, only 53% of adults are homeowners. That's a 12 point swing downward. And if I can make one more comment about this, I think there's an interesting, interesting implication here. This research shows us that we're not becoming a renter nation. We're really becoming more of a failure to launch nation or a multi generational household nation. So you could, you know, one of those kind of a negative connotation, one's a positive or could be a positive. I guess. Both of those things I think are true. Either way, more adults living with their parents and that keeps the official homeownership rate maybe artificially high. Using the census as traditional measure. All right, next headline comes from Bloomberg. It says U.S. housing starts rebound. I'm sorry, U.S. housing starts surge on rebound and multi island construction. Okay, some of you already know what I'm going to say here. If you've been listening for a while on this podcast, you know what, I'm going to say it anyway. The census data and multifamily starts is totally unreliable. Don't believe it. There's been no surge. It's a methodology issue. I think it's probably come up a little bit, but definitely not as a surge. It's lagged and they're just playing catch up from all the starts. They missed the peak a few years ago. And man, I wish, I certainly just wish reporters stopped taking census data on starts as gospel and instead lean more heavily on private sector data providers who invest substantially more resources tracking apartment starts than does the census. Okay, next one. And I warned you earlier, I got another research paper I'd share with you, but I don't want to again. You know, I don't think you're going to be bored by this one. This is very, very interesting and maybe counterintuitive for, for, for some negative voices out there. It's written by some academics from Yale, Harvard, Notre Dame, nyu, Chicago Booth, big lineup here, legit names. And let me just read the abstract here from this report and let the author's words stand on their own. So by the way, the headline is Equilibrium Effects of Eviction Protections, the Case of Legal Assistance. So it's kind of a dry title, but here's the, here's the abstract. It says right to council programs provide free legal assistance to tenants facing eviction. While such Assistance can delay or prevent eviction. Large scale programs may create cost for tenants through equilibrium rental market responses. Leveraging their partial rollout of Newark's program, we find listed rents rose by 29 to $38 a month. We then develop a framework to evaluate the policy's impact on tenant welfare and quantify it using linked data on evictions, rental listings and tenant income. After accounting for both direct benefits and insurance value of stronger protections, our estimates imply that equilibrium response responses are enough to cause a small net reduction in tenant welfare. Okay, so there's a reduction in, in tenant welfare. I mean, it's worse for tenants when you add the right to an attorney that's usually funded by the city. So the bottom line is that, you know, the so called right to counsel may be great for lawyers, but not as great for renters. And I'll tell you, a little editorializing here is I always find it pretty odd that cities will quickly shuttle money off to lawyers instead of directly helping renters trying to get by. I mean, send the money to renters who actually need it even. I mean, and this is by the way, I know there's complicated cases sometimes on downplay that some, some cases it's very helpful to have a lawyer. But a lot of times we've seen cases where even in basic cases of unpaid rent, instead of helping that renter get caught up and be more housing secure, it's going to a lawyer. And so hopefully this research helps restore some common sense there. All right, our last headline of the week, this one comes from Bloomberg. It says London landlords head for the exit as rent laws deal final blow. Okay, so you know, I guess just building on the prior story here, when we talk about tenant protections, is it really a tenant protection if it actually backfires on renters in a negative way? And that's what I think these last two things are really showing in this article from Bloomberg. Now I don't have time to get all the details of what's happening in London, but basically the London's tightening the screws on landlords in the name of tenant protections. They call it the Renters Rights act and it's already resulting in reduced rental supply. So again, if your tenant protections result in reduced housing supply, it's not really a tenant protection and reduced supply ends up most impacting those the lowest end of the income ladder. Next up, it's time for some good news. Okay, you know we have news, it could be good news and there's nerdy research news. And now we got some just pure Good news. Okay? And there's a lot of good news happening out there too. So I would like to put some attention on this. And as always, good news is presented by my friends at Apartment Life. Apartment Life care coordinators help apartment owners care for residents by connecting them in meaningful relationships. And this in turn benefits everybody from the residents, the on site staff, the apartment community's bottom line, everybody. And so if you own or operate apartments and you're not already partnering with Apartment Life, check them out@apartmentlife.org okay. So a few days ago, my friend Pete Kelly at Harborn Life, he was, he told me he was reading through some weekly reports from his Apartment Life coordinators and he got a particular one that caught his attention. I'm going to read. This comes from a woman named, a department life coordinator named Antonisha. And it says, I did a welfare check on an elderly woman today after receiving a call this morning from her family in New Jersey who haven't been able to get in touch with her for a few days. Thankfully, she was at home and answered the door and I was able to sit down and chat with her for a while and let her use my phone to contact her relatives. Let, let, let them know that she was okay. She started, she stated that her phone was still broken from a few days ago. I offered to let her use my phone whenever she needed and I will stop by and check on her in a few days just to make sure she is okay. Okay. So it's a beautiful story, simple story, but I think what was really interesting is that little detail there. This woman's relatives from out of town that when they couldn't find this, this elderly woman, they contacted an Apartment life coordinator. And so Pete wondered, and as I would, how did they know to contact Antonisha from another state? And it turns out the backstory was maybe even more beautiful than the journal entry. So this woman, she's 74 years old, she lives in this apartment community. She's never been married, doesn't have children. Most of her brothers and sisters have passed away and the only family she has left are some cousins living in New Jersey. And so last year she needed surgery. She had no one to drive her to the hospital or bring her home afterwards. You know who did it was the Apartment life coordinator, Antonisha. And after that the two started spending a lot of time together. She was helping the Apartment Life coordinators, helping with meals and doctor appointments and whatnot. And so then she, she ended up telling Pete that this woman became like a grandmother to her and that's why this woman's relatives knew about Antonisha and that's what community looks like. And that's good news. And if you have good news to share, please send it along to Info. All right, let's get back to today's rental housing trivia question we asked this presented by authentic. The question was among large MSAs, which one led the nation for domestic migration rate in 2025 according to John Burns data? Was it Austin, Charlotte, Jacksonville, Nashville or Raleigh? If you guessed C, Jacksonville, Florida, then give yourself a pat in the back. Maybe a little bit of surprise of this group since there's a bunch of high flyer markets here, but so is Jacksonville. Jacksonville's domestic migration rate was 5%. Again, that's move domestic move ins minus move outs as a share of total moves. And Jacksonville was a tad ahead of Charlotte and Raleigh, which finished second and third. San Antonio was fourth. Nashville was fifth. Next up, it's time for today's interview sponsored by Funnel, the CRM and Agentic AI platform trusted by four of the six major REITs whose AI recently beat three major competitors across six independent third party conducted blind studies. Nearly three in four renters preferred Funnels Chat AI and two in three chose their voice AI according to the results there. So visit funnelleleasing.com to see it in action and try it yourself. Okay, so as promised, today's guest is Chris Porter, the OG of Housing Demographics and a senior vice president at John Burns Research and Consulting. So excited to have Chris back in the program. It's been about a year, so a lot's changed since then. Great guy, smart guy. And I'll tell you, he's one of the people I always just learn something from every time I talk to him. So let's jump in. All right. Welcome to the interview portion of today's podcast and I am honored to welcome back Chris Porter from John Burns Research and Consulting. Chris, our episode last year around the same time was one of our most watched and listened to episodes of 2025. Everybody loves demographics, so thank you for coming back.
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Oh, my pleasure, Jay. It's always a pleasure.
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So, you know, so Chris, I know that you do a lot of things, but you're, you know, you know, you're, you're really rooted. Your work has been really rooted in demograph and housing demographics in particular. And so I want to start talking about renter household formation. And there's been, y' all put out some great data and there's been a lot made about the fact that renter household formation continues to be Pretty strong. Even as obviously homeowner household formation has flattened. Given where, you know, rates and prices are now, some of that simply seems to be that Americans are renting longer than they would otherwise. But, but, you know, the, the thing I always ask people, try and make the point back is, hey, like the number is still a net positive. And so that means there's people, there's still new renters being formed. New renter households, I should say, being formed. So, so who are these new renters coming into the market today?
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Yeah, I mean, I think if we look at the younger side of the, the demographics equation, so it's, you know, I look back at 2025, that was marked 18 years after the peak in births in the US in 2007. So we had peak 18 year olds in 2025. And what was happening was we saw those births ramp up in the 1980s, the 1990s, and that's the group that's increasingly becoming renters today, forming households today and renting first. And as you pointed out, they're renting for longer. So that is a, certainly the main driver of that rental household formation. And then also you have factors such as immigration that was leading to a pop in renter numbers over recent years that slowed a bit. And then, you know, if you look at all the age demographics, really, we compare this back to, you know, where we were 20 years ago. Almost every single group, a larger percentage of the population is renting than they were 20 years ago. So, you know, it's a mix of things. But I think it is really driven by that increase in that young adult population who are, you know, for all of them that are living with mom and dad still, some of them are moving out. And, and that's, that's really who's forming the bulk of those renter households. I know we're gonna, we're gonna talk about that, that group as well, in a minute, I'm sure.
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A
Yeah, that's such a good point because I think that, you know, for those of us who are just purely focused on tracking, you know, housing demand or home sales, rent, apartment demand, like we tend to latch on to, you know, the job numbers in particular, but I think sometimes we overlook just pure demographics. Right. I mean, and obviously the raw numbers of just of, of, of, of young adults is still a net positive right now. And, and then let's, let's get to that second point you just brought up, which is you've, you guys have a really good chart, and I steal this one all the time. I hope you don't mind about young adults living with parents. And I have the previous version of this chart in my deck which was showing your analysis of census data where the 25 to 34 year olds live with mom and dad. That number had gone down from 2020, 2023. And I think that obviously contributed to the spike in apartment demand we saw during that time, even amidst a period of high inflation. Now it's the opposite your data shows we've added with obviously analyzing the census data, we've added 900,000 adults living with mom and dad over these past two years. And, and that obviously probably takes away some potential apartment demand. So why did that trend reverse even as inflation has cooled down? And I know we've all seen the numbers about fewer college graduates getting jobs, et cetera, but is there more to the story here or do you think it's all about jobs?
- [33:11]
B
I mean, I think it's a big part of it. It really kind of comes down to confidence. I think if you listen to any of the public earnings calls these days, whether it's housing related or not, there's a lot of talk about uncertainty. And you talk about people not wanting to buy a home in times of uncertainty, but I think there's even people not wanting to even form a household in times of uncertainty. We've seen this happen certainly in the past where there's greater uncertainty in the economy and what's happening in the broader global world. And it's, it's a slower household formation. And as we know, we've seen people tend to rent first before they move into homeownership. And so I think it does first show up in, in some of the, the rental dynamics, the household formation dynamics, you see more people tending to live with parents a little bit longer. And so that's, it's not unprecedented. What's interesting though is, I mean, if we go way back, you know, let's go back 100 years, you used to live with mom and dad until you moved out and got married. Now people were getting married at 20 and 21 back then. And so that, you know, wasn't as long a stretch that they were living with mom and dad. But we, you know, we wrote this book back in 2016. We, we defined the generations by decade born and it was really those 1950s born generation whom we called the, the innovators. This was the group that moved out of their parents home like no other generation had before. And they really kind of set the, the high bar for independent living at a, at a young age. They couldn't wait to get out of the house. And what happened was, Jay, we saw that rise in multifamily there in the early 1970s.
- [34:56]
A
Yeah.
- [34:56]
B
I think in response to people moving out in greater and greater numbers. Now what we're seeing right now is elevated levels of, of 25 and 34 year olds living with, with parents. Yeah, it's come down a little bit from where it was and it bounced back up again. But, but it's still a much higher number than it has been in, in decades. And certainly, you know, I, I don't see that going away. And, and it's not just a Gen Z thing. Right. These are trends that have been evolving over time. We saw with each subsequent generation they were a little bit more likely to live with mom and dad. And I think part of that is also related to the relationship between the, the parents generation and their kids. The. I think that has shifted over time to the point where I know even some parents are perfectly thrilled that their kids are living with them into their twenties. Yes, at some point we want our kids to launch on their own, but I think there's maybe a more of a growing acceptance of that with this younger generation. The parents are okay with it.
- [35:59]
A
Yeah, yeah. In fact, there was just an article a couple of weeks ago, but maybe less than that, about in the Wall Street Journal and it was really interesting. It was, it talked about what you're saying, which is that the American attitudes about living with parents have changed. And it used to be viewed very much and probably still some people view it this way, but it used to be viewed as a failure to launch. You know, we would kind of joke about, you know, the, the video game generation, just particularly boys, you know, adult boys living with mom and dad, playing video games in the basement. But that, that, that narrative that, that stigma sort of shifted and now we talk, this article talks about how it's now being viewed was, is kind of a financial savvy move in some cases. So is that sentiment, is that contributing? Just think like this. I guess you sort of said you think this is a structural shift, but is that, is this just becoming. Maybe we look back at this like the 20, 20, 23 period where that number is coming down, if you want to, with parents, was that we're going to see that as maybe just a temporary disruption of a longer term trend of more young adults living with parents.
- [36:57]
B
Also, like when we look back at what was happening in 2020, 2023, you had more freedom to work from anywhere. So if affordability was Your challenge, you could probably move out and move somewhere else. You weren't tied to an office in the same way. We also had a lot more government stimulus that I think helped allow people to maybe make that move out of their parents house. And now we're seeing, look, we're feeling the inflation crunch everywhere, whether it's groceries or it's housing costs. You know, I do think that affordability is playing into this as well. I don't see on the, let's say, for sale housing side of things, affordability, we're chipping away at the affordability crisis. But I don't think there's going to be a monumental change there here in the next few years. When I look at mortgage rates, we're expecting to kind of maintain that 6.5% level. At least that's what the futures markets are implying. And prices are starting to go back up again. Really, it's income growth that's going to drive any improvement in affordability I think in the next few years. And so again that's tied back to the jobs market. We also, we look at jobs, we've got a slower growing working age population in the U.S. i mean to the point where we're estimating right now we actually have a loss of people in the ages of 20 to 64, a net loss. And part of that is due to the big pullback in immigration which had boosted that population for the last several years. But this was something that was pretty predictable when you go back and we even talked about this in our book 10 years ago, you know, just based on the aging of the population, job growth is slower. And so, you know, maybe that helps with income growth. If we've got a slower growing supply of labor and you've got to pay people more in order to entice them into the workforce and keep them in the workforce. But that also could be inflationary as well because now you're having to pay people more and that just drives up the cost of everything. So it's all interconnected.
- [39:01]
A
Yeah. And another piece that's connected with this and you sort of hinted at this is consumer confidence or consumer sentiment. And I've been telling people, and you tell me if you disagree with this, but I've been telling people I think it's maybe the most underrated variable when we think about rental housing demand, apartment and SFR demand because consumer confidence could impact household formation, which is, you know, when you're nervous with parents, if you're nervous about the economy, about your job, about the future, you know, you're less likely to make a major decision for it obviously to buy a house, but that could also just be to leave mom and dad's place and go rent your own place. So confidence seems to be very low right now. Obviously the Michigan index shows it's the lowest it's been on record, even worse than it was in the great financial crisis. And so it's weak even among gainfully employed Americans. So are you seeing any sign of what effect that's having on household formation?
- [39:52]
B
No, I think there's a direct correlation there. And what's interesting is we pick apart the difference between consumer confidence and consumer sentiment. So consumers confidence is measuring how people feel about the world today or how they feel about their current situation. And that's had been running kind of a little bit low, below average as you pointed out. It's running even lower now. But it's consumer sentiment is how they feel about the future and that is what's been at all time lows more recently. So you're right. Who's going to make a big decision when they're not feeling confident in the broader economy in their job? I think not only does it impact home buying, but I think it also impacts just household formation in general which ultimately as we talked about impacts the rental market first. You know, right off the, right off the bat.
- [40:44]
A
Matt. Well you just, you I always learned someone talking to you, I didn't realize confidence and sentiment were different things. That's good to know. And you stop using them interchangeably. Yeah. All right, so another one of the way you talked about briefly I want to talk about this more another demand driver immigration. And and again I you guys have such great housing. I mean this is you know just for anybody listening. John Burns Research and Consulting Your your housing demographic data is fantastic. And one of the have that's really good. It shows recent immigrants from high encounter countries, mostly Latin America. They tend to have two characteristics that don't necessarily match what we would for those listening who are investing in what I would call investment grade professionally managed housing. It's not always a match like Reese immigrants, your data shows their household sizes are typically 2x the size of domestic born households, about five people in a household versus two and a half for domestic born. And then also your data shows they tend to live in smaller sub 50 unit multifamily buildings which we generally call sub institutional as well as lower cost single family rentals. So again I think that you know immigration there's been a lot of noise around this topic and obviously it's political and so it's going to create a lot of noise. But you know, my take in this, and I want to get your take on this, I'm just going to give you what I think about you tell me where I get this wrong, is that while immigration policy is obviously impacting total demand for housing and for rentals, it does not seem to be evenly distributed and meaning that impact seems to be more pronounced at the lower end of the market, the sub institutional rental housing market. But anyway, that's my take. Am I wrong or how do you think about this topic?
- [42:20]
B
It's a very nuanced topic for sure. And I think we could even get into how this plays out different geographically. You've got some markets where you've got immigration coming from countries where red till, you know, people are going towards those smaller sub institutional properties and then you've also got, you know, immigration. And we saw this certainly a decade or so ago. We were writing the book talking about just all the money from Asia. It was coming over, you know, it wasn't just crossing a border, it was coming over on a plane with, with suitcases full of cash. Because, you know, the US was seen as a safer investment.
- [42:57]
A
Yeah.
- [42:57]
B
And that, you know, can tend to congregate in certain markets. Maybe some of the higher, more expensive coastal markets. We certainly see that here in California in a number of the more expensive markets where that foreign immigration was driving a significant portion of housing demand. And maybe that is the group that tends to go towards more the institutional grade, apartments in larger buildings, that sort of thing. But you're right, I mean the shifts that we've seen more recently with immigration trends over really the last few years, it has tended to favor that smaller sub 50 unit building, sub institutional grade. And you're right, it is a larger household size. You're dead on with that analysis. But I think we have to look at it market by market and really understand how that plays out depending on where you are in the country.
- [43:55]
A
Yeah. And to that point I should point out like a place like Boston, we've seen weakening rental housing demand. And that's obviously a market that's been very, you know, a lot of universities, colleges and they've have a lot of, you know, of international students. And you talk to people who operate in that market and they just say, hey, we don't see the same number of international students they have in the past. So you're right. I mean it's a, it is a very market specific issue for sure. All right, so a lot of Hot topics. So let's get you another one. Rent versus Own. Again, you've got great data showing that you guys measure all in costs of owning for a new home buyer each month versus what it would cost to rent. And the latest data I recall was about a thousand dollars more per month to own a house versus rent one and about seventeen hundred dollars more to own a house versus renting an apartment. And, and I just, as a brief aside, I just want to mention that, Chris, I don't know if you run into this. Anytime I share these stats on social media, there's always someone who feels triggered that I didn't mention the long term benefits of home equity appreciation or the long term missed opportunity cost of investing in the S&P 500 versus a down payment on a house. So I just want to put that, I just want to give that out there for anybody who's listening and doesn't like those stats. There you go. But putting that aside, you know, this gap is obviously much higher than it's been historically. You alluded this a little bit earlier, but I want to get into this a little more. Is that gap here to stay and is there a plausible scenario where the gap could narrow in the foreseeable future via some combination of rate reductions, home price declines and rent hikes?
- [45:27]
B
Yeah, so you're exactly right. I mean that gap is as wide as it's been. And if we even zoom in on some of that, we do a report that focuses on 33 major markets across the country. That gap is even wider when you sort of average all those markets together. Now I should point out this is a national number. We're talking, I think the thousand dollars and $700 difference that you're talking about between owning and single family rental or in apartments. Those are national numbers. There are certainly parts of the country where that is not the case. I mean, I look at some of these Midwest markets, Chicago, Minneapolis, Indianapolis, that gap is pretty narrow between renting and owning. But you know, you look at the California markets and it's a much wider gap and that's one of the reasons that you've got such low home ownership. In some of these California markets, just the cost of owning is so prohibitive. So there's again, I feel like nuance is sort of the word of the day here. This is a very market specific conversation. But you're right, that gap is nearly as wide as we've seen. As I talked about on the affordability front. I mean, we're seeing home prices rising. Again, I don't really see in most markets I don't see that the prices are necessarily coming down. You know, we do look at the all in cost. So it's not just the cost of principal and interest, but it's also your taxes and your insurance and those are costs that are going up as well. Now certainly they're rising costs on the rentership rate or on the rentership costs as well. But it just feels like the combination of what's happening with rates, with, with taxes, with insurance is making that gap even wider. So maybe, you know, there's some room to push on rents on the rental side. I, I don't think that the rents are going to rise so fast or home prices are going to fall so fast that you see that gap compress significantly over the next few years. You know, I think it's, it's, it's a wider gap generally speaking, but again very nuanced by market. There are, there are markets where it almost seems as equally in real time, you know, measuring the real time monthly costs. It's almost as affordable to rent as it is or to own as it is to rent.
- [47:50]
A
Yeah, no, you're right. I saw this in the, in your data for the Midwest markets and it's definitely a very different story just than those steady eddy Midwest markets versus obviously the coast, but even some of these Sunbelt markets where that gap is really widened out. And I agree, I think one thing too, we think about how this gap could narrow versus rent versus own. I think about even if there's a scenario, if rates really materially decline, there's probably a real problem in the economy. And then that's probably also going to be a period when rents are not really rising at the same time. And so it's hard to see a period where how do you meaningfully change that number? I think you use a term like chipping away, it just feels like it's not going to happen fast. I think you're right. Okay, so let's go back to another topic. It's kind of another great chart you have and I'll put this on the screen for those watching is the percent of 30 year olds who own a house by year. And, and so you got this chart showing that that number of the percent of 30 year olds who own a house, it's been going down since the 1980s, the share of 30 year olds only owning a house. It even went down during periods of economic expansion and relative home affordability. And so you know, one of the things I always try to point Out. And you keep words in the nuance. I love the nuance. I mean, you and I both do. We're nerds for these things. So I always see, I think, a lot of housing analysis, there's this heavy dose of nowism in the narrative. And nowism, when I say that, I mean, like when people say, oh, young adults aren't buying a house because it's not affordable. And obviously that's true. It is. Affordability is a challenge. But would we be seeing this? I guess my question to you, Chris, is would we be seeing the same trend, even if to a less severe degree, even if there weren't these home affordability issues that we've seen of late?
- [49:38]
B
Yeah, I think we would. And one of the things we show in that chart is decade by decade, how those trends have evolved. And this is one of the things we spend a lot of time focused in on. Our book is like, especially when we were writing this 10 years ago, and all this focus on the millennials who were this big generation that were going to kind of save the. And all this sort of thing, and they found themselves graduating from college at bigger and bigger numbers with more and more debt and finding hard to find a job in the wake of the great financial crisis. And so I think so much focus got put on the millennials. But when we go back and take a step back and you look at that chart and how it's evolved over time, every subsequent generation has moved out of their parents home at a later point in life. They've gotten a job later, they've gotten married later, they've had kids later. All these triggers that often, you know, induce some sort of housing demand, whether it's rentals or ownership, every single one of those has been delayed. So it's not just a millennial thing. It's not just a Gen Z thing. But I think to your point about the nowism, we just focus on this, this current generation and how they're different from everybody else without realizing how that evolution over time. So, yes, I think we would have seen this over time. And a big part of that, the one major metric that we're tracking there that actually has been rising over that period of time, it's. It's education, right? So we've got a larger percentage of the population that's going to post, you know, high school education. And, you know, increasingly for a while there, it was, it was the master's degree was. That was a new bachelor's degree, too. So it wasn't just doing four or five years in undergrad, but then doing subsequent work in school after that. And that's a trade off that people are having to make. Right. The idea that whether it's financial with the hopes that this leads to higher income at some point in your life, or just the general satisfaction of having accomplished graduating from college and the satisfaction that comes with that, the hope was that there was that payoff. And in the meantime, the trade off is time and it's money. So that's time, four or five years that you're investing in school and pushing out some of those other milestones as well as the cost of education has risen so much that debt follows you for years, if not decades after you graduate. And so I think if we had continued to see that, let's strip out everything else. If we had continued to see education rising in terms of the percentage of people going to college or, you know, post high school education, I think it's only natural that we would see delays in those other milestones as well. So I don't think this is anything surprising, but it is kind of amazing when you look at those, those charts and just see the evolution of a 30 year old over time. But as John Burns always reminds me, you know, just because somebody's buying a home at 32 instead of buying it at 26, they're still buying a home. Yeah, maybe just pushing that, you know, kicking that down the road a little bit. I think the majority of young adults still aspire to homeownership. They still aspire to have a family, you know, someday. It's not for everyone, but it's just, it's just happening later.
- [52:57]
A
I agree. And people are living longer too. Right, so. Exactly. If everything's going later. So that, that goes my next question, which is, and I'm excited to run this thesis by. Okay, so. So bear with me for a second. Okay. I get asked a lot about the impact of the aging population. I'm sure you get asked this a lot too. So the general narrative among what I would call the housing doomers is that as the population ages, that's bad for all types of housing. Now I think it's. We keep talking about nuance. I think this is more nuanced topic. And I look, and here's my thesis. I look at student housing as a roadmap of sorts for what can happen with housing more broadly as the population ages. And so in student housing. For those listening, if you don't follow student housing as much, we've seen weaker macro demand drivers as the college age population has flattened off or even declined in some spots. But what's really interesting, and here's the nuance, is that the impact has not been evenly distributed. We've got haves and have nots where the Power 4 schools, the big brand name schools, big brand, the big private schools, they continue to boom, they've got no problems at all. While regional colleges, the lesser known private schools, some of them have really struggled or even shrunk. And so my thought is, could that be a preview of what happens in housing more broadly where the impact is not necessarily evenly distributed, but we see more winners and losers not just by MSA but also by neighborhood. And so the impact for investors means betting on the right neighborhoods, the places where people actually want to be. So Chris, there's my thesis. Am I wrong? Am I right? Feel free to disagree with me.
- [54:31]
B
No, I think there's, there's clearly a haves and have nots scenario going on right now. And you know, where all the growth is going to come in terms of population over this next decade, it's in that 70 plus. I mean a great majority of the growth is going to come in that 70 plus population. As the last of the boomers, you know, enter those 70s era of their life. We're seeing a lot more growth there. We're also seeing some growth in the 25 to 54 year old population as you know, Gen Z and even the millennials age more into those years, but just astronomical growth in that older population. And I think it's good for housing of all types. We see more people living independently on their own and so they can stay in their own home longer. I think it also benefits rentership because we do see people as they get older make that decision to, you know, I don't want to deal with all the maintenance and upkeep of a home that I own and I'm happy to let somebody else do that and rent and maybe give me some extra freedom to do so. So I think, you know, as we see people living longer, we're going to see that growth in that older population. Really I think we need to segment within, not just look at the 70 plus population as one monolithic group or the 65 plus population is a monolithic group. And clearly there are haves and there have nots. There are people who have done very, very well for themselves. The stock market booming, their portfolios are in fantastic shape. But you also have that portion of the population that's going to struggle to make it through retirement. And quite frankly, as they're Living longer, they've got a longer retirement they now have to finance. I think there's a trickle down effect there too because we've been talking for years about this generation intergenerational wealth transfer and how the boomers with all their wealth are going to help the younger generations, whether it's their kids or their grandkids with their housing choices. That inheritance then becomes a way for them to get their, their foot in the door if it's a rental, if it's, if it's an owned home. And increasingly I think it's, it's the grandkids that need more help than the, their adult, you know, the adult children at this point. But there's clearly not an even distribution of wealth amongst the older generation as well. So you have, you know, clear haves and you have clear have nots in the older generation. And as their wealth gets transferred, I think you're creating haves and have nots on the next generations as well. There's going to be some groups that are going to inherit some money and it's not even just upon the death of a parent or grandparent. We're seeing more evidence that young adults are getting help from their parents who are still alive or their grandparents where they're still alive. And so I think there's going to be some people that clearly benefit from that wealth transfer and there's going to be some that don't.
- [57:30]
A
Yeah, yeah. And obviously I think it's pulling that together. I think that for those who are benefiting, like they're going to want to be in the more desirable places, the more desirable neighborhoods, you know, closer to the jobs and the retail and the restaurants and the action like. And so just from a locational perspective, I think that those spots are, are going to be the net winners in this, in this, in this equation. So Chris, I'm going to pull you in another debate here. And we were talking about, we're just firing away hot topic after hot topic. So there is a, there is some, I would say, I want to call it a hot debate. I would say there's a, there's a, there's a emerging debate about apartment development and basically the unit sizes and types and the, with shifting and aging demographics, there's some view that we need to be building larger apartments. And, and as you know, in the past couple of decades there was a big shift you mentioned, like especially the millennials coming to adulthood and the Gen Z, there's been a big focus toward smaller units, more one bedrooms, more studios, a reduced Share of two beds and three bedroom units. So again, with the population, the demographics changing as they are, just purely from a demographic perspective, is there a case to be made for developers going back to building larger units or will that demographic just naturally drift to SFR and build to rent regardless?
- [58:52]
B
Yeah, I'm happy to share my, my thoughts on that and I'd be curious to see what you're, you're thinking as well. You know, as we look at people renting for longer, there's a likelihood that they're raising kids or you know, just living as a couple in single family or multifamily units longer and you know, they're raising their kids in single family rentals. If homeownership is continuing to be pushed down the road, I think the single family rentals, especially build to Rent offers that a great, it fills a niche, right, for somebody who wants more bedrooms, who wants a sizable yard for their kids to run around in. And I don't want to just totally pin this on, you know, households with kids. I think there is sort of as we see more and more society renting longer and you know, they may choose that lifestyle. So I think, and it's not even just about bedroom count for the sake of bedrooms, but maybe you need a home office and so that extra room provides a little bit of space. So, you know, I think really all types of rental housing will sort of benefit from these demographic shifts. I think the single family rental, the build to rent certainly is a niche that gets, that fills some of that demand. And I think within the apartment space there is an opportunity to segment and continue to diversify in the product there as well. I don't know. Does that ring true with you? Is that something you.
- [60:33]
A
That's kind of my thesis as well, which is that I think especially there could be, and this is pure speculation, but I think there could be some opportunity for, you know, the early childhood and baby maybe stages where you still want to be in that cool neighborhood that's walkable, you're not worried about schools yet and you don't, you aren't really necessarily ready for the, you know, the, the traditional single family house with our owning or renting or you're just, you know, you've, your income's gone up, you're an older renter, you still want to be in that, in that neighborhood. You like renting an apartment, you like the amenities of being in an apartment and you just want the extra space for a home office or whatever. And so I think there's an opportunity there in the right sub markets to address that demographic shift.
- [61:22]
B
Did you use the phrase baby maybe? Yeah, I've never heard that one before. That's a great one.
- [61:26]
A
I love it. Yeah, my friend Bobby has used that term. And basically it's the couples that are thinking about having a baby, maybe trying to have a baby, but aren't quite there yet and still are in that apartment stage of life, but maybe want a little bit bigger unit. Maybe it's that kind of den slash office they can use as a nursery for a stage of life if they need to.
- [61:46]
B
All right, if you don't mind, I'm
- [61:47]
A
going to use that term. Oh, yeah, absolutely. All right. So speaking of, let's talk a little about single family rentals. SFR demographics. These are generally people who are a little bit older than a traditional apartment renter. How much work have y' all done? I'm just curious about the differences and the demographics between households that rent a single family house versus own a single family house. And really my question is, is it mostly about different income levels and credit worthiness or do you see other. More. You go back to our keyword of the day, nuance to it.
- [62:20]
B
Yeah, you know, it's interesting. I think we spend a lot of time, or at least I've spent a lot of time looking at sort of the difference between demographics between the single family renter and a multifamily renter. And certainly, as you were talking about, it does tend to be a little bit of an older renter and single family. They're more likely to be married, more likely to have kids. I'm trying to think if I've actually done the analysis we probably have on a single family renter versus a single family owner. I mean, certainly, I think, you know, income probably comes down to factors in there somewhere. Age probably factors in there as well. But I think we're increasingly seeing some renter by. By choice, people who either. Maybe they're not excluded from homeownership because of financial reasons, but they just. They like the flexibility that renting gives. Again, maybe it comes down to uncertainty or. Or just confidence in their. Their job. That's a good question. I'm gonna have to dig into that a little bit more.
- [63:22]
A
Yeah, let me know if you dig into it. You know, my. Yeah, my hypothesis, I think you're. I think there's two things. I think one is, you know, in this whole debate about sfr, we've seen ash right now, there's been some SFR portfolio, SFR owners that come out and said, hey, you know, I think it was pretty, you know, they own progress and they said 90% of our renters can't qualify to buy a house. And so they're renting one. And that's how your life. So that's obviously a big part of it. And then I think you also mentioned another one which is you have people who for whatever reason just want to rent by choice. Like they're not ready to buy a house. Maybe they don't know if they're going to stay in that area long term. They're just trying to figure out what neighborhood they want to be in. They just, you, they're, you know, they're not ready for whatever reason. So. But yeah, I'd be curious, you know, if and when, you know, you guys get around to seeing what, what, what nuances are there. That'd be fun to look at.
- [64:06]
B
Yeah.
- [64:08]
A
All right, so Chris, before I let you go, I have to ask you one more question. So, you know, you advise a lot of different groups in the housing from for sale to for rent. And so I just want to put you in the spot. You know, you're, you're advising a group of investors that invest in apartments, build to rent and single family rentals. And they're asking you, they say, chris, you know, give us your bull case for renter demographics and renter demand over the next decade. Like, what would help support our case for investing in rental housing? What would you tell them?
- [64:39]
B
Look, I think both pieces of the pie can, can grow at the same time, right? We can have growth in owners, we can have growth in renters, and we know that household growth is going to continue in the US Maybe at a slower pace than it has, but I think there's opportunity in both sides of that equation and they fit into each other as well. When I look at the renter side of things and just, I mean, let's start with household formation again. Looking at. Most people will tend to rent when they first form a household before they move into ownership. I think we've got a pretty sizable young adult population right now. As I mentioned, we had peak 18 year olds last year. And so we're entering this period of time where they're going to be making housing choices over the next 20, 30, 40 years. And a lot of their rental housing choices for somebody who's 18 today is going to be coming in the next 10 to 15 years. We know there's a lot of pent up demand amongst that younger generation. We talked about the percent that live with parents or grandparents Today, simply because of whether it's by choice or out of necessity. The hope is that they're starting to make some good financial decisions, put away some money they can save for rent, that they can save for an eventual down payment. So I'm pretty bullish on just the aging of the population. We're probably going to see some, some continued growth in that younger adult renter population. As we talked about earlier, we've got people renting a higher share of people renting at every age group compared to where we were 20 years ago. And I think it also comes down to affordability as well. We see those challenges on the for sale side for affordability if prices continue to rise, if rates don't go down. You know, income growth is really the driving piece of the affordability equation and the affordability solution. And I think that's going to keep people in rentals for a longer period of time. So I think we're probably a little more front loaded. Our take is that we see a little bit stronger renter growth here in the next five years and then still positive, but slower renter growth five years out. So as we look at years six through 10 over the next decade, slower but still positive and still pretty solid renter growth there as well.
- [67:08]
A
Yeah, well, that's a good take then. I mean, you see opportunity in the shorter term versus longer term in terms of just pure, you know, you know, population that there for. For. For renters. Well, Chris, as always, this has been awesome. I always learn a lot listening to you and I know our audience has as well. So thank you for carving out time amidst all the summer chaos to talk and hope you enjoy the rest of your summer.
- [67:29]
B
All right, thanks, Jay. Take care.
- [67:49]
A
All right, big thank you to Chris for being our guest today. Thank you to jpi, Madera, Funnel Authentic, the Kirkland Company, Telecloud, Hawthorne Residential Partners, and Apartment Life. Thank you to all of you for spending part of your day with us. We'll see you next time.