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    • Many millennials can’t buy houses. Apartments are getting larger instead.

    Many millennials can’t buy houses. Apartments are getting larger instead.

    A lack of affordable homes are keeping millennials renting — and that means apartments are getting larger.

    RENTcafe analyzed 92 cities and apartment floor plans in buildings currently under construction, with 36% trending toward larger apartments than what had been built in the last five years, according to data from its sister company, Yardi Matrix. The average one-bedroom apartment over the last five years was 752 square feet, while under-construction, one-bedroom apartments were 28 square feet larger. Three-bedroom apartments over the last five years averaged 1,462 square feet, but three-bedroom apartments under construction were 105 square feet larger.

    The new apartments are being built during a red-hot housing market that has heated up even more during the Covid-19 pandemic. Sales of existing homes saw a record year-over-year price increase of 23.6% in May, according to separate data from the National Association of Realtors, while inventory is down about 20.6% from one year ago, with about a 2.5 month supply of unsold inventory.

    “Even before the pandemic, there was a lack of housing supply. There still is, and it doesn’t look like it will be resolved any time soon,” said Doug Ressler, manager of business intelligence at Yardi. “What you have is a generation of millennials who would be looking at buying homes but can’t because of lack of supply.”

    Millennials are getting older, starting families and interested in larger spaces and more of a single-family home feel to their apartments, which is driving up the size of the units. And the dynamics of this supply and demand means builders are building larger units,” he said.

    But the supply shortage won’t be going away anytime soon, Ressler stressed.

    Nobody has a resolution yet to the housing availability problem,” he said, adding that experiments to bring down costs with 3D-printed houses or using manufactured housing have run into local rules and regulations, as well as resident pushback. “Nobody has come up with a magic bullet yet that will do that.”

    But Ressler also said the ongoing Covid-19 pandemic and the prolonged work-from-home period of the last year made people more interested in reconfiguring their apartments and giving up space — in areas like closets — in order to create space for work-from home arrangements.

    “The pandemic and work-from-home has made people more conscious of the space in which they live and work,” Ressler said in a blog post on RENTCafe. “The pandemic has significantly accelerated issues on designers’ minds well before 2020. These issues involve the rise of the home as a workspace, and a deeper emphasis on health and well-being.”

    The cities with larger apartments under construction now, compared to the average over the last five years, include:

    1. Everett, Washington, with an average apartment size of 928 square feet. Apartments under construction are 267 square feet larger.
    2. Kirkland, Washington, with an average apartment size of 610 square feet. Apartments under construction are 211 square feet larger.
    3. Scottsdale, Arizona, with an average apartment size of 931 square feet. Apartments under construction are 208 square feet larger.
    4. Midland, Texas with an average apartment size of 912 square feet. Apartments under construction are 182 square feet larger.
    5. Fremont, California with an average apartment size of 845 square feet. Apartments under construction are 151 square feet larger.
    6. Albuquerque, New Mexico with an average apartment size of 813 square feet. Apartments under construction are 103 square feet larger.
    7. Norfolk, Virginia with an average apartment size of 825 square feet. Apartments under construction are 99 square feet larger.
    8. McKinney, Texas with an average apartment size of 917 square feet. Apartments under construction are 98 square feet larger.
    9. Arlington, Virginia with an average apartment size of 814 square feet. Apartments under construction are 91 square feet larger.
    10. Oklahoma City, with an average apartment size of 888 square feet. Apartments under construction are 89 square feet larger.

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