Photo credit: Bryan Davis
How will population affect housing over the next 10 years?
Topics: Residential Real Estate
Rental demand could plateau, and first-time homebuyers could increase in numbers over the next 10 years.
According to National Association of Realtors Chief Economist Lawrence Yun, the population in the United States is projected to increase by 27 million people over the next 10 years.
In an article written by Yun for Forbes, the economist explains that the current population of 325 million will likely be around 352 million by 2027. Those numbers are based on the fact that currently there is a new birth every 8 seconds and a death every 11 seconds.
Key in this increase is the fact that the number of young adults (in their 20s) is expected to fall. Since this demographic is more likely to rent, coupled with the glut of new apartment construction over the past few years, Yun predicts that rental demand will slow and even flatline by 2027.
There will be growth for the adults aged 30-40 (five million projected), paving the way for more first-time homebuyers.
Yun projects 7 percent growth of adults in their 40s, which could give way to selling their homes for better product.
Those in their 50s, Yun said, will fall by nearly 4 million people, which could put resort and second home markets at risk.
Adults aged 65 and older are growing rapidly, Yun said, and this 35 percent rise could bode well for warm-weather and income tax-free states like Florida, Texas and Tennesse.