Monday Market Update: Generational Notes On New Construction
Two different generations are driving two very different home types.
The nationwide inventory shortage of homes is inarguable as housing demand has and will continue to outpace supply for more than a decade. However, did you know that new construction housing types are very strongly linked to the generations that hold the greatest market share?
That’s right, a recent article published by the National Association of Home Builders (NAHB) reveals that two key generations are driving two distinct housing types.
As you can see from the graphic above, new single-family residence (SFR) construction is occurring most in areas where Baby Boomers are the largest present generation. In contrast, areas in which millennials make up the majority population are experiencing most new construction as multifamily units.
These trends most recently calculated in Q1 2023 gave been prominent since Q1 2016. In 7 years of data, regions with high populations of millennials have never seen a market share of multifamily building fall below 52%.
The oft-overlooked Generation Z is a leader in neither housing type. Areas dominated by Gen Z account for 12.8% of new SFRs and 9.4% of multifamily units. Locations in which Generation X are the majority account for just 4.3% of new SFRs and 2.8% of multifamily builds.
The Bottom Line: not all generations hold a correlation between population share and new housing type. But when they do - they really stand out! The NAHB declares that single-family building is focused on Baby Boomers and that multifamily building is millennial focused. Data supports that fact over the last 7 years… do you think it will hold true in the next 7 years as well?
Warmest wishes (and stay cool!),
Bobbi & Team
Bobbi Decker
DRE#00607999
Broker Associate, Bobbi Decker & Associates
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
NAR Instructor….“Designations Create Distinctions”
CIPS, SRS, ABR, CRS, SRES, GRI, CLHMS, REI, AHWD, RSPS, MSLG
Bobbi Decker & Associates fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. For more information, please visit: http://portal.hud.gov/
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