Millennials, Baby Boomers, and Rebounding Multifamily Home Construction
19 Pages Posted: 31 Jul 2015
Date Written: June 23, 2015
The sharp rebound in U.S. multifamily construction since the housing crisis has been driven largely by young adults, who swung back toward living in apartments following a shift away during the housing boom. But adults in their 50s and 60s accounted for nearly all the net increase in multifamily occupancy from 2000 to 2013. The article decomposes changes in occupancy for four age groups into changes in population, changes in headship, and changes in the share of the age group that lives in multifamily units. Young adults’ headship has been trending down since 1980, largely due to the increase in the share of low-education individuals who live with their parents. Young adults’ multifamily share has been trending up since 1980, reflecting delaying marrying and having children. Improving health and longevity have pushed back the age at which older adults typically downsize from single-family to multifamily units by twenty-five years since 1980. The leading edge of the baby boom is about to enter the age range where such downsizing accelerates and so U.S. multifamily construction is likely to remain strong over the coming decades.
Keywords: Housing Demand, Residential Construction, Baby Boom, Millennials
JEL Classification: R21, J11
Suggested Citation: Suggested Citation