While many seniors still choose to own a home rather than rent it, there are still some who find renting the more comfortable option. A study by RENTCafé shows that renter households over 60 have increased considerably between 2007 and 2017, outpacing owner households and rising faster than other age groups.
Specifically, among the top 30 largest U.S. cities, four California cities boast some of the highest shares of 60+ renters: San Francisco has a share of 24% senior renters; Los Angeles – 20%; San Jose – 18%; and and seniors living in apartments for rent in San Diego make up 16% of the market. However, as expected, New York has the highest share of renters older than 60 with 27% (for a net of 572,132). Apartments for rent in Sacramento are also popular among seniors of this generation, with the city boasting a 20% share of 60+ renters.
The research also uncovered that the oldest U.S. cities by median age are located in popular retirement spots in states like Florida, California, and Arizona. Overall, the top 30 oldest cities boast a median age greater than 39.6 years; Cape Coral, FL, occupies the first position with an average median age of 47.9. It’s followed by Hialeah, FL, with 46.5; and Scottsdale, AZ, with 46.
Another major highlight of the study is that, nationally, renter households older than 60 increased by 43% between 2007 and 2017, while those aged 35 to 59 went up by 17%, and those aged under 35 saw the slowest increase of 7%.
The differences between older renter households and older owner households are also visible. In the same time period, the percentage of renter households went up by 43% while that of owner households increased by 31%. This is mainly due to seniors downsizing and moving into rentals, which don’t require as much of their energy and money to maintain as owning a house.
It’s also projected that, by 2035, the share of renters older than 60 will continue to increase and that of all other age groups will drop. According to the projection, the share of renter households older than 60 will reach 31%, while that of renter households aged between 35 and 59 will drop from 44% in 2017 to approximately 43% in 2035. However, the biggest drop is projected to be from those aged 34 and under, decreasing from 34% to 27%.
By 2035, the number of age 60+ renter households is estimated to reach 18.6 million. Therefore, this cohort is expected to have a considerable influence on the U.S. real estate market. As their numbers increase, the available supply of rental apartments is expected to keep up with demand.