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6 Trends Will Shape Housing Markets |
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Through at least 2030, the housing market will depend on the desires and fortunes of two generations: Baby Boomers and their offspring, Echo Boomers, according to a recently released report prepared for the Bipartisan Policy Center. The report highlighted six key demographic trends that will drive the housing market for at least the next two decades.
1. Growth in the senior (65 and older) population will create new demands for affordable, accessible housing.
2. Seniors will contribute increasingly to the housing supply, as they release many more housing units than they absorb. Whether the homes released fit the needs of younger generations is an open question.
3. Echo Boomers, those born between 1981 and 1995, represent a long-term opportunity for housing market recovery, but are struggling in the economic crisis. Many Echo Boomers are currently living with relatives. This generation's smaller size, as compared to the Baby Boomers, has contributed to a sharp decrease in multifamily housing construction resulting in a present shortage of rental units.
4. Over the next two decades, the US housing market will depend on Echo Boomers. While high levels of education are in their favor, Echo Boomers are plagued by high credit card and student loan debt, which could affect their purchasing power.
5. Rental housing demand is likely to climb in coming years. Asking rents have been rising and rental vacancies have been falling over the past two years.
6. Black and Hispanic Americans have suffered significant setbacks in homeownership. |