Young Adults Will Drive Demand
…for new housing
Young adults, not aging boomers, will drive the demand for new housing. That’s the conclusion of George Masnick, Fellow, The Harvard Joint Center for Housing Studies.
Census data show aging baby boomers (those born 1946-1955) began shifting most of the population growth to the over 65 age groups starting in 2010. Masnick notes the dominance of this cohort in the population growth equation will persist until “sometime after 2030 when they begin to reach the end of their lives in large numbers.”
“Many are quick to conclude that, since population growth drives most of the demand for new housing construction, we must primarily build for the elderly,” Masnick stated. He believes that logic is flawed, instead contending elderly population growth does not represent new additions to the population. “Most elderly are already housed quite comfortably and show little inclination to move to a different residence,” he explained.
The Joint Center’s analysis of census and other data shows fewer than 4 percent of the population over the age of 65 changed residences in 2012-2013. More than 80 percent of the elderly live in owner-occupied housing, and their mobility rate is now about 2 percent.
Conversely, during the past decade, from 2000-2010, the estimated 40 million young adults ages 25-34 claimed the highest rates of mobility. Statistics show this cohort dominated the moving/recent occupants segment, accounting for almost three times as many as the largest baby boom group, which average only 6.2 percent of total moves during the 2000-2010 timeframe.
Masnick also compared occupancy rates for newly built housing. Based on those findings, the Joint Center projects that by 2030, only about 20 percent of newly built units will be occupied by heads of households over the age of 65. “To increase the share of newly built housing occupied by the elderly significantly above that figure, tomorrow’s elderly will need to relocate out of older housing at higher rates than we now observe,” he concluded.
The Joint Center suggests helping the elderly achieve a better fit with their housing will largely involve initiatives to support aging in place. For the next 15-plus years, as the baby boomers age, Masnick expects the need for assisted living facilities and nursing homes will gradually increase.
Whether boomers’ mobility rates will increase may depend on public and private efforts to provide housing better suited to the needs of this aging population. However, he cautions, “there are a host of demographic, social and economic characteristics of baby boomers that argue for less, not more, geographic mobility among the next generation of elderly.” He expects to explore that topic in future reports.