Changing Demographics: Implications for the Housing Market

Housing Finance Council Call

Laurie GoodmanUrban Institute

July 1, 2015

Overview

Household growth continues, mainly fueled by Hispanics and other

non-whites 2010-20: 11.6 million net household growth; 2020-30: 10.4 million net

growth

Hispanics make up 39% of growth in this decade, 46% in next

Rental housing growth will outpace ownership housing growth Renters grow by over 700K/year 2010s, 580K/year 2020s

Continued net growth of homeowners @ 450K/year both decades

Homeownership slipping; African Americans hardest-hit By 2030, overall homeownership falls to 61.3%

African Americans slip from 44.5% to 40% (lowest since before 1970)

Other minorities more stable as young immigrants age and integrate

Huge growth in senior households We’re adding 1 million senior households yearly

Senior renters will double, increasing pressure on affordable housing2

Source: Laurie Goodman, Rolf Pendall and Jun Zhu. “Headship and Homeownership: What Does the Future Hold?”, Urban Institute, June 8, 2015.

3

0

2

4

6

8

10

12

14

2.7 4.6 2.2 2.1 8.9 11.61.3 4.8 1.9 2.5 9.1 10.4

Projected household growth, 2010-2020Projected household growth, 2020-2030

Source: Urban Institute projections.

Net new households, millions

Growth in households continues, largely driven by minorities

23%

46%39%

18%

12%

18%19%

100%

100%

88%77%

24%

1990s 2000s 2010s (p) 2020s (p)0.0

200,000.0

400,000.0

600,000.0

800,000.0

1,000,000.0

1,200,000.0

72%

55%

38% 44%

28%

45%

62%

56%

Owners

Renters

Annual household growth, millions

4Source: U.S. Census 1990-2010, Urban Institute projections (p).

Rental housing demand high from 2010 to 2030

5

Homeownership Rates by Race/Ethnicity

Race/ethnicity 1990 2000 2010 2020 2030White 70.1 72.4 72.2 70.8 69.7Black 45.2 46.3 44.3 41.1 40.0Hispanic 43.3 45.7 47.3 46.9 48.2Other 53.7 53.0 56.3 55.9 56.9Total 65.3 66.2 65.1 62.7 61.3

6

15–24 25–34 35–44 45–54 55–64 65–74 75–84 85+ Total-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

-0.7

2.0

0.5

-2.8

3.1

6.8

2.1

0.7

11.6

0.0-0.8

2.3

0.8

-2.3

3.3

5.9

1.3

10.4

2010–20 2020–30

Household Growth by Age Group

millions