Demographics are changing in the U.S., and the country’s housing market is changing along with them. Data from the 2010 Census revealed that the U.S. as a whole is growing older, and further analysis has shown that the suburbs are aging faster than cities. CNBC’s Diana Olick reports on these shifts and what the trends will mean for housing in the U.S.
Olick looked at Census analysis from John Burns Real Estate Consulting which show households comprised of married couples dropped from 75% in 1960 to just 48% in 2010. At the same time, the number of non-family households – households with only one person, or people living together who are not related – has nearly quintupled since the last census, while family households increased only 1.7 times.
John Burns Real Estate explains that these rapidly growing parts of the population want new things in housing: non-family households generally require less space than a family household, and want three or fewer bedrooms. They are more likely to value location – proximity to work, entertainment, etc. – than house size, and they are less willing to commute than a family household. That is to say: one of the fastest growing household types in America wants to live in smart growth neighborhoods.
These demographic trends are already being reflected in the real estate market. As The Wall Street Journal reported last week, demand is up for rentals and vacancies are at their lowest rate since 2008. And as Olick noted:
We’ve also talked a lot about the surge in renting; we’ve blamed it on the housing crash, fear of buying into a depreciating market and the tight credit conditions that are pricing many potential buyers out.
Perhaps there’s more to it than that as well. Perhaps with fewer large family households and less desire for a big space, smaller, full-service rental apartments are more desirable to a growing segment of the population.
Understanding how demographics and household compositions in the United States are changing can help developers, municipalities and even the federal government better meet housing need. As each of these stories point out, demand is rising for communities with smart growth features and if these population trends continue this demand will continue to rise for years to come.