Photo: James Blucher/Flickr
US household growth over the next 20 years is expected to surpass growth recorded over the last decade, but not quite hit the highs seen in the 1970s. And according to new research released earlier this week from Harvard University’s Joint Center for Housing Studies (JCHS), household growth could also spur residential construction levels in the US.
Between 2015 and 2025, an estimated 13.6 million households are expected to be added to the US, with an additional 11.5 million households being added between 2025 and 2035, says JCHS. These new projections incorporate recent population growth projections from the US Census Bureau, which are “substantially larger than the Census Bureau’s 2012 population projections.”
Additionally, the JCHS projections make “methodological changes related to headship rates,” or the ratio of households to people. This is designed to reflect that “shifts in headship rates have significantly impacted household growth over the past decade.”
The new projections are higher than those seen in the last decade, but are on par with the historic growth rate of 13.5 million households added during the 1990s. However, the projected growth rates are still well below the nearly 17 million households added during the 1970s.
This projected growth in households could lead to continued growth in residential construction activity over the next two decades.
The main driving forces of household growth in the coming decades are expected to be Millennials and minorities. Millennials are projected to form 23 million net new households between 2015 and 2025. Meanwhile, minorities are expected to make up 72 percent of overall household growth.
Furthermore, aging Baby Boomers are expected to drive the number of senior households up to “unprecedented heights” in the coming decades.
According to JCHS, the combination of these “forces” will ultimately reshape the country’s housing demand over the next 20 years.
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