Marriage and having children are common trigger points for moving out of multifamily rentals and into homeownership (or into single-family rentals).
Millennials (turning 25 to 40 in 2019) have delayed both marriage and starting families, resulting in longer tenure in rental multifamily housing.
The average age of first-time mothers was 26.8 years in 2017. First-time mothers have been getting older since the early 1970s (when the average age was 21.4). The pace of change rose in the past decade with annual increases averaging 0.2 year during the 2009-2017 period, double the 1970-2017 average of 0.1 year.
Women are starting families later for many reasons including economic uncertainty, high costs of homeownership, rising educational and career goals, plus medical advancements offering women more choice over when to have children. Whatever the reasons, delayed childbearing has slowed the exodus of women (and families) into homeownership or single-family rentals.
Total Births Continue to Edge Down
In 2017, U.S. births totaled 3.86 million, 2.3% lower than 2016 and the third year in a row where total births declined. The 2017 total is down by 3.6% from 2010. The decline is even more noteworthy given the large millennial population with women in traditional childbearing years. Millennials are not producing a mini baby boom.
Fertility rates dropped 2.3% in 2017 to 60.3. The 2017 rate was also the lowest in history.These statistics pertain to all births, regardless of order, but also provide another reason for younger women and households to stay in multifamily rental housing longer than previous generations at the same ages.
Birth Rates Decline for Women in 20s
Falling birth rates of women in their late 20s helps explain both the declining fertility rate for all ages and the lower number of total births. This trend has also played a large role in delaying home purchases.
In contrast, the birth rates for women in their 30s rose through most of the last decade. In 2017, the birth rate for 30-to-34 year-old women exceeded the rate for the 25-to-29 year olds for the second year in a row. The 30-year-olds were making up for not having children in their 20s, and the rising birthrates for the older mothers undoubtedly spurred moves to homeownership or single-family rental housing.
The latest data, however, shows a reversal of rising birthrates among the 30-year-olds. Birth rates for both 30s age cohorts experienced a small decline in 2017. There are no obvious explanations for this reversal, and 2018 data will provide further clarity.
The birth rate for women in their early 40s continued to climb in 2017, although the actual number of births remained low. Q1 2019 homeownership data showed that homeownership rates for households under 35 were unchanged year-over-year. At the same time, the 35-to-44 age cohort had a notable increase, a gain partly explained by the rising birth rates of 40-to-44-year old women.
By Jeanette Rice, Americas Head of Multifamily Research, CBRE.