Three New Census Reports Give Insights on Housing Market Trends
The U.S. Census released a treasure trove of data in April, including population by age, homeownership rates, and a report on the changing demographics of young adults. Taken together, these three reports give us insight into current and future housing market trends.
The Census release on 2016 population[1] reveals that the most populous age in the U.S. is 25 at almost 4.8 million people. The largest three age groups are 24 to 26, with 14.2 million Americans combined. Common wisdom would tell us that these young adults will be heading into the homeownership market soon[2]. In this year’s first quarter the homeownership rate[3] was 34.3 percent for households led by people under 35 (Figure 2). Although that’s lower than the rate for other age groups, applied to the sheer size of the young adult population it translates into large numbers of potential homebuyers.
Coming of age in the time of the Great Recession may have shaped the attitudes of young adults, and home affordability might stand in the way of young adults setting up households and buying their own homes. The new Census report titled “The Changing Economics and Demographics of Young Adulthood: 1975-2016”[4] discusses how reaching the milestones of young adulthood (those aged 18 to 34) has changed over the past 40 years. The report finds that compared with previous generations, today’s young adults delay moving out on their own, getting married, and having children. Delaying these life events may also mean delaying homeownership. Figure 3 contrasts the living arrangements of young adults in 1975 and 2016, showing that the percentage of young adults living with a spouse or unmarried partner has fallen from 58 percent in 1975 to 39 percent in 2016.
It is reasonable to expect that as these young adults age, they will take part in home buying, but we might need to wait until the most populous age cohort gets a little older before they ramp up their home buying.
[1] https://www.census.gov/newsroom/press-releases/2017/cb17-tps38-population-estimates-single-year-age.html
[2] According to the National Association of Realtors 2016 Profile of Home Buyers and Sellers, the median age of first-time home buyers is 32.
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