More than one-third of millennials renting apartments in cities are considering leaving the city, half citing cost of living as main factor
Quicken Inc., maker of America’s best-selling personal finance software, today shared results from a recent survey of more than 1,000 millennials renting apartments in urban areas. While 93% of millennials have stayed in their city of residence since the start of the pandemic, more than one-third (37%) are considering moving away in the next year.
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Responses indicate that millennials wouldn’t move all at once, but in waves over the next 12 months, suggesting a gradual exodus. Here’s a breakdown of when they’re considering leaving:
- Within six months — 16%
- Between six months and one year — 21%
Fewer than half (47%) of millennials indicated a definitive plan to stay in their cities long term and 16% weren’t sure. Additionally, 34% of millennials are now working remotely, offering more flexibility in where they choose to live.
“Millennials living in cities have been spending a substantial amount of their income on rent — the rule of thumb suggesting one-third of a person’s pre-tax income be spent on housing isn’t always realistic in highly sought-after urban locations,” said Linda Itskovitz, VP, Marketing and Sales at Quicken. “COVID-19 is expected to have a lasting financial effect on this generation, and we’re starting to see that as millennials reconsider their living situations.”
Cities are losing their luster
Following the recession in 2008, suburban growth slowed while droves of millennials just graduating from college moved to big cities where jobs were concentrated. Many considered millennials the urban generation and questioned if they’d ever settle into suburbs. However, the trend started to reverse in 2017 when some cities reported hitting “peak millennial,”1Â and in 2018, census data2Â for city population growth found that suburban growth outpaced city growth for the second straight year.
Now, as the pandemic has changed nearly every aspect of our daily lives, millennials are taking a step back to assess what they want from a living space — many seeking out financial security, more space and physical safety.
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Almost half of those (48%) considering a move from their city cited COVID-19 related reasons, including no longer being able to enjoy social/recreational activities, a job or pay cut, no longer needing to be in an office, and not wanting to use public transportation, as their top reasons for wanting to move away. Additionally, respondents cited cost of living (50%), a desire for more living space (46%), wanting to buy a house (37%) and concern about safety (24%).
Few have benefitted from rent relief, despite many experiencing job loss or financial strain
Thirty-seven percent of millennials said their employment changed due to the pandemic (17% lost their job, 10% were furloughed, and 10% had their salary reduced). Very few received support through a decrease in rent or temporary credit, adding strain to an already tough financial situation. Since the start of the pandemic, only 4% of millennials had their rent decrease, 7% received a temporary discount/credit, and 8% deferred their rent for a few months.
“Lease terms can play a significant role in decision-making. As we see annual leases expire, millennials will have the opportunity to revisit their financial commitments and determine their next move,” Itskovitz added. “We’ve already seen rent in cities across the country start to decrease, and as more people move away from the most expensive cities, we can expect a continued downward trend in rent prices.”
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