Baby boomers are altering the American Dream.
After having the home in the suburbs, the kids, the two cars, and maybe even the picket fence, a growing number now want to ride elevators to rental apartments and walk out the door to restaurants. When the kids are grown, an increasing number of empty nesters are selling homes and aspiring to live like urban millennials — in rental buildings full of amenities and free of lawn mowing, shoveling, mortgages and property taxes.
It's not unusual for empty nesters to consider downsizing and avoiding tasks such as yard work. But typically downsizing has meant buying smaller homes or condos. Now, for a generation with a reputation for setting trends and yearning for freedom, an increasing number want to rent rather than own.
“It's nice to have freedom," said one man, who moved into an apartment with his wife after selling their home about three years ago. He now walks to work, and his wife says she feels like she's on vacation every day. Apartment living frees up time spent on maintenance and they walk to restaurants, plays, movies and musical events.
"We both feel like we are in our 20s."
The number of boomer renters is still small. But there were just 10 million in their 50s and 60s in 2005, and in 2015 there were 15 million. They account for more than half of the nation's renter growth in the last 10 years.
It is a "dramatic increase," and a trend that's likely to continue as the giant generation of 77 million people, born between 1946 and 1964, ages and seeks easy living.
At a National Multifamily Housing Conference, "landlord after landlord mentioning the surprising surge in older renters." Many of the boomers have sold homes and have been looking for luxury apartments in walking distance to stores and entertainment.
In many metro areas, older renters are driving demand. There is an increase in people "who don't see their primary residence as an investment" and don't want their retirement money tied up in a home.
Renting is a unique twist for many boomers, who began their adult lives when the sheer size of their generation starting households drove a sharp climb in home prices in the '70s and '80s. For years many assumed renting was a waste of money and a home an essential investment. But after living through the recent housing crash, that assumption has been tarnished and renting now seems fine.
You aren't going to get equity quickly any longer. As empty nesters, couples can sell their three-bedroom home and renting can be a short-term experiment that would allow them to move easily, and without selling costs, if they changed their minds. Many have no urge to move.
Homeownership among people 50 to 64 slipped 5 percentage points between 2005 and 2013. Part was driven by foreclosures and job loss in the recession. Others are transitioning to renting as a choice. They want "cost-effective options that demand less time, physical effort and money to maintain." As people enter their 70s, it is expected that the desire for ease and safety will intensify.
The combination of 8 million foreclosures and a 10 percent unemployment rate during the housing crash and Great Recession sparked a surge in rentals among all age groups during the last few years. There are 19 million renters who previously owned homes. But older boomers were not as hard-hit in the housing crash as people ages 36 to 55, because people in their 50s and 60s tended to have purchased homes before the housing peak and therefore had more equity to absorb losses.
The interest in potential boomer renters is coming from developers seeing opportunity in the luxury market.
Boomer parents are also being tempted to rent as they see the housing their children are considering in new luxury buildings.
"They see the light and the view, and they are jealous," said one developer. "They want a vibrant life" instead of isolation in empty homes in quiet suburban neighborhoods. "They are busy with their phones and iPads, and can live in a new building for less than a mortgage and stop writing checks to the handyman and the landscaper. They don't have to worry about the snow."
Although luxury buildings have been especially popular with empty nesters craving activity, boomers are also renting near suburban areas where they raised families. They want to continue ties with churches and communities.