The average age of households has increased as Baby Boomers (born 1946-1964) have moved into their 50s and 60s, but Millennials (born 1985-2004) are now the largest generational group and their influence on housing markets will expand in coming years. Also increasing is the percentage of households led by minorities and immigrants. These are just a couple of the findings in the Joint Center for Housing Studies (JCHS) of Harvard University's report, The State of the Nation's Housing 2015.
The average age in the United States is almost 38, which is expected to rise to 41 by 2035. With the fallout from the Great Recession, the relatively smaller Generation X (born 1965-1984), and Millennials holding off on venturing out on their own, the rate of household formations has slowed by half since 2008.
Looking ahead, Millennials – just entering their prime household-forming years – will drive significant growth of new households. Even if the percentage forming households stays the same as it is today, household growth will jump to an average of nearly 1.2 million annually by 2035 – close to the average in the decade before 2008 – given the size of the U.S. Millennial population.
Many of the Millennials forming households also will be new to this country. Immigration is expected to ramp up and, by 2035, surpass the 2000-2007 average of 1.2 million newcomers a year.
More broadly, minorities are expected to account for 75% of net household growth over the next 10 years and 85% over the next 20. As a clue, 45% of Millennials are minorities versus 40% of Gen Xers and 28% of Baby Boomers.
It's not all about younger people, though. Over the next 20 years, the number of people aged 70 years or older will nearly double. As a society, we'll be challenged to meet their housing needs in terms of affordability, accessibility, and assistance for those who need help in caring for themselves.
Find out what people across the country had to say about what home means to them, on My Home by Freddie MacSM.
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