MBA Chart of the Week: Changes in Population Age 25-44 and Single-Family Starts
As Baby Boomers came of age in the early 1970s, 25-34 year olds provided robust demand for single-family housing.
As they matured into 34-44 year olds, the market continued to build for the Boomers. It is well-documented that the average new home quality in the U.S. increased rather dramatically in the late 1980s which coincides with the aging of the Boomers and their increasing wealth. On average, the housing market built 1.1 million new houses per year for the thirty years from 1970 to 1999 despite significant periodic dips in single family starts, each marking a recession.
In the early 2000s, we saw a population decline in both of these important age categories. Nonetheless, increasing credit availability expanded access to others and the homeownership rate grew by more than two percentage points during first five years of the new decade despite a complete lack of growth in the age groups that traditionally drive demand.
Since the last recession, single-family starts have remained at historically low levels. On the far right of the graph we can start to see growth among 25-34 year olds in the Millennial generation, the next driver of new housing demand.
To view the Chart of the Week, click https://www.mba.org/news-research-and-resources/forecasts-data-and-reports/forecasts-and-commentary/chart-of-the-week.
(Lynn Fisher is vice president of research and economics with the Mortgage Bankers Association; she can be reached at lfisher@mba.org. Joel Kan associate vice president of economic forecasting with MBA; he can be reached at jkan@mortgagebankers.org.)
