Aging of Millennials Impacts Apartment Demand
Digested from Calculated Risk
In the next few years, the bulk of millennials will be entering their 30s, and the high demand for apartments will begin to wane, according to economist Bill McBride, who writes the Calculated Risk blog.
The 20 to 29 age group will peak in 2018 (until the 2030s), and the 25 to 34 age group will peak in 2023. “This suggests demand for apartments will soften in a few years,” McBride writes.
Since people in their 30s are more likely to buy homes, he predicts millennials will spur growth in the housing market, and single-family starts will ramp up in the near future.
McBride notes that household formation data is a better measure for home-buying behavior than population data, but reliable household data has a long lag and isn’t yet available for this group.