I want to encourage you strongly to look at Bill McBride’s excellent post relating trends in the demand for housing to demographics. Here’s a snippet. After displaying a very interesting graph of U. S. demographics by age cohort he observes:
We can see the surge in the 20 to 29 age group last decade (red). Once this group exceeded the peak in earlier periods, there was an increase in apartment construction. This age group peaked in 2018 / 2019 (until the 2040s), and the 25 to 34 age group (orange, dashed) will peak around 2023 / 2024.
For home buying, the 30 to 39 age group (blue) is important (note: see Demographics and Behavior for some reasons for changing behavior). The population in this age group is increasing and will increase further over this decade.
The current demographics are now very favorable for home buying – and will remain somewhat positive for most of the decade, although most of the increase is now behind us.
I’ll have more on the demographic issues that Bill raises in a later post but please take a look at what he has to say.
This is all Harry Dent stuff. Demographics are a first order effect. After all, the Baby Boom went through the economy like a rodent through a snake and affected all sorts of things. Related is life cycle spending analysis. And you can then go from rental/family home housing to furniture to appliances to education to health care etc etc.
Then there are second order effects. Here in the SE to SW housing is just berserk due to public policy effects. I mean TN, NC, SC, GA, FL and of course TX. (I can’t speak to AL, AR etc.) NY, MA, NJ, IL………..not so much.
We look a lot at this stuff.