Marketing & Sales

Demographics Data Reveal 2030s Tipping Point For U.S. Housing

Brookings Institution senior fellow William Frey's recent analysis of a 2nd release of data points from the Census Bureau's 2020 decennial census has three highlights market-rate residential real estate and construction strategists will appreciate are right in their wheelhouse.

Marketing & Sales

Demographics Data Reveal 2030s Tipping Point For U.S. Housing

Brookings Institution senior fellow William Frey's recent analysis of a 2nd release of data points from the Census Bureau's 2020 decennial census has three highlights market-rate residential real estate and construction strategists will appreciate are right in their wheelhouse.

August 7th, 2023
Demographics Data Reveal 2030s Tipping Point For U.S. Housing
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Demographics, for a moment in the 1970s and '80s, had an A.I.-like applied business and strategic buzz factor.

"Demographics is destiny" emerged as a system of beliefs, and as a relatively young social science, it had the coming of age and young adulthood of the post-World War II Baby Boom as evidence of its sweeping predictive powers. At each successive life-stage, baby boomers reshaped communities, schools, the workplace, business strategy, economics, and culture.

Demographics' statistical properties, definitions, and foundational filtering – on households as its building blocks of insight – could model futures that, otherwise, hid over foreseeable reality's horizon lines, or even around the next corner in time, or the corner after that.

Technology, consumer behavioral data, even geospatial information now offer the kinds of precisely predictive intelligence into a person's future behaviors, attitudes, and preferences, as to render demographics a blunt tool.

Not, however, when it's Bill Frey curating the raw materials into take-aways. Demographics for Bill Frey – a Brookings Institution senior fellow and research professor with the University of Michigan's Institute for Social Research and Population Studies Center – remains a predictive instrument, a periscope.

His recent analysis of the second release of data points from the Census Bureau's 2020 decennial census has three highlights market-rate residential real estate and construction strategists will appreciate are right in their wheelhouse.

  • the nation continues to age
  • the nation starts to "get-less-young"
  • while the aging dimension applies statistically to more white Americans, the younger generations are far more diverse

Take-aways from a social and policy standpoint – including for congressional reapportionment and Federal resource allocations – become more geo-specific than ever, says Frey.

These patterns have led to a “racial generation gap,” in which the younger population—more influenced by immigration in recent decades—is far more diverse than older age groups. This demographic phenomenon has been shown to underlie many aspects of American social life, including its politics. While these national patterns are important in their own right, they vary considerably across states and regions, and thus exert more political and social influence in some areas of the country than others. Accordingly, this report pays special attention to the local dimensions of these demographic dynamics with interactive maps for states and metropolitan areas.

Dr. Frey's high-level analysis and his geographic detailing of the theme and variations of an aging, slower-growth, and diversifying national and local population, first of all provide better recognition of what's present as well as a look beyond the horizon and around the corner for what to expect, prepare for, and plan.

The newly released 2020 census statistics emphasize that the nation continues to age, in large part due to the ascension of the outsized baby boomer generation into its senior years. At the same time, the statistics show that nonwhite racial minorities are largely responsible for growth in the nation’s young and middle-aged populations.
As indicated in an earlier census release, the small decline in the nation’s youth population would be much larger were it not for the growth of Latino or Hispanic, Asian American, and other nonwhite populations, as well as those who identify as two or more races. The newest census data shows clearly that these minority groups are totally responsible for recent gains in the nation’s prime labor force age population.
More notably, the new statistics make plain that substantial old-young racial gaps exist in much of the country, and are likely to persist in the near term.

A snapshot look at the aging trends illustrates 1) what we knew would happen, which is that the Baby Boom cohort would tilt the balances in age composition by virtue of both the size of the generation and life expectancy trends, and 2) what we hardly could have imagined, which is the rather rapid growth decline among younger Americans.

Source: Brookings Institution

Evolving geographies of aging, race, economics, educational attainment, frontline worker resources, housing and community planning – these data suggest – contain themes with entirely new trend-lines than could have been imagined, for instance, if U.S. population growth continued on the dynamic trajectory it was on 15 or 20 years ago.

The particular data around exits and destinations for domestic migration, empowered by technology platforms and emerging patterns and policies on remote and hybrid work will etch out winners and losers among municipalities and regions as economic vitality and dynamism re-concentrate as the inflection continues.

Here's just a handful of mid-to-long-term business-critical effects and implications nested in these high-level trends, ones residential real estate and construction enterprises and operators need to map to in order to prosper:

  • Affordability – in the local policy, building efficiency, land positions, and capital investment spheres – will either fuel or choke off economic dynamism insofar as it impacts younger, more diverse adult households.
  • Senior living – design, home technology, healthcare connection, and well-being supportive – solutions are early in a learning and business model curve
  • Community and culture dynamism will grow more local and place specific, less homogenous
  • Sustainability and resiliency will take on economic, health, and cultural dimensions as important as environmental ones.
  • The jury's out on the density debate.

A new Pew Research analysis notes:

Source: Pew Research
While a majority of adults ages 30 and older would prefer communities with larger homes over those with more walkability, adults under 30 are somewhat more likely to express the opposite preference. This reflects a modest shift from 2021, when 55% of 18- to 29-year-olds preferred communities with larger homes. That share has dropped 10 percentage points over the last two years."

The good news here is this: there's much more to learn from the future than the entire wealth of knowledge from the past.

ABOUT THE AUTHOR

John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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