The institutionalization of the single-family rental market will be driven by key three demographics over the next decade: millennials on the cusp of parenthood, office workers looking for more WFH space, and aging baby boomers, according to a new report from MetLife.

The firm estimates that 11 million new households will be formed in the US over the next decade, and many of those will consist of Americans for whom the price of homeownership is increasingly out of grasp. Saddled by elevated student debt and a lack of savings, nearly 70% of homebuyers in the millennial segment say debt is delaying their purchase.  On the other end of the spectrum, baby boomers are navigating Social Security and pension challenges and lower savings rates against the backdrop of ever-increasing medical costs.

"Although it was difficult to foresee the demand increase resulting from the pandemic and work- from-home space needs, the wave of millennials becoming parents and aging Baby Boomers was not," the MetLife report notes, adding that in the past "we argued investors should begin focusing on larger format housing, including SFR, and that this type of housing could generate the lion's share of new rental demand during the 2020's. We continue to believe that to be the case today, but with an added boost of single and non-child households seeking more space."