According to Builder Online, national statistics from a recent report by Trulia are now adding more weight to this theory.
The rising prices of stand-alone homes have caused some homeowners to migrate into urban areas where they can rent a condo or apartment instead. This trend is what CityLab co-founder Richard Florida predicted called the “Great Reset.”
The share of U.S. households currently renting jumped from 36.1% in 2006 to 41.1% in 2014. Simultaneously, the share of people who owned their own homes began to decline.
It comes as no surprise that the increase in renting was strongest among the Millennial generation. From 2006 to 2014, the rates of Millennials renting grew from 62.5% to 71.6%.
However, this younger generation was not alone. There was also a substantial increase in renters during that time of 35- to 54-year-olds increasing from 33% to 40.7%, and 55 and older rising from 24.4% to 27%.
The largest populations of renters are now centered around tech hubs, such as San Diego, San Jose, Oakland, Austin, Boston, and Seattle.
In fact, as RIS Media reports, part of what is raising the rates of renting for Millennials is their desperation to find jobs after graduating college.
Many are forced to metropolitan areas where there are more positions available, but this means the cost of living and rent is higher in these regions as well.
According to Zillow’s Breakeven Horizon Analysis, in most of these areas, it can actually be more cost-effective to purchase a home rather than rent, but only if the resident will be there for a few years.
For example, Boston, one of the youngest cities in the country, is estimated to have a breakeven horizon of three years. For a tech hub like San Francisco, breakeven horizon is about 2.9 years.
“Even with record-high rents in job centers like San Jose, Boston, and Washington D.C., putting off a home purchase might be the best financial decision for a young person who has saved enough for a down payment, depending on how long they intend to stay in their jobs and homes,” said Zillow Chief Economist Svenja Gudell.