LOS ANGELES–Like all other retailers and financial institutions, credit unions have been somewhat obsessed with attracting and retaining Millennials as members.
As part of that, much attention has been focused on how the Millennial generation might behave differently than previous generations, and how credit unions need to change to meet their needs. But one new analysis suggests Millennials are acting like those who came before them in one way—they are moving to the suburbs.
While the common perception is that Millennials prefer to live in urban areas near restaurants and entertainment, a new study said it found the inflow of young professionals into cities has reached its peak, and that the outflow of mid-30s couples to the suburbs has resumed after stalling during the Great Recession.
The research, by Dowell Myers, a professor of demography and urban planning at the University of Southern California, was published in a paper that noted American cities reached what Myers described as “peak Millennial” in 2015.
Meanwhile, other research has found similar trends. The flow of young professionals into Philadelphia, for instance, has flattened, according to JLL Research, while apartment rents have started to soften in a number of big cities because of a glut of new construction geared toward urban newcomers who haven’t arrived, the New York Times reported, citing Zillow data.
“Certainly the softening of rents is one sign that they are not coming in at the pace that people thought they would,” Diane Swonk, an independent economist in Chicago, told the New York Times.
For credit unions, the implications extend to branch locations, mortgage financing, automobile financing, and more.
This isn’t the first time the same trend has reversed itself. The New York Times said the late 1970s and 1980s saw an influx of people in their 20s moving into cities, only to reverse course as those same people got older and moved out. Indeed, one headline in the Times in 1981 read, “Changing San Francisco is Foreseen as a Haven for Wealthy and Childless.”
But not everyone agrees. Joe Cortright, director of the City Observatory, an urban think tank in Portland, Ore., told the New York Times he believes city populations will continue to grow as young people come in and older people stay longer. In addition, he told the Times, the decline in births between Millennials and the generation after them — often called Generation Z, is more like a slight grade than a cliff, so even as Millennials age there will be a new, though smaller, supply of 25-year-olds coming behind them.