A January 28, 2025 report published by the Cameron Academy, "The Outlook for Housing Starts: A Future Defined," addresses the relationship between Housing Demographics and Demand. Read the report HERE
Changing demographics are a key factor in this as the Baby Boomer generation ages out of the house ownership market (see above graph). The report begins with the following note: "The Congressional Budget Office (CBO) has released a comprehensive report on the outlook for housing starts over the next 30 years, highlighting the critical role of population growth and demographic shifts in shaping the future of housing construction in the United States. This analysis, available in full at CBO’s official website, underscores the complex interplay between economic factors and housing demand." A key early point in the report is how housing needs will soon be shifting downward. "The report anticipates an average of 1.6 million housing starts per year over the next decade. However, as the 2030s and 2040s approach, a notable decline is expected, with housing starts averaging 1.1 million per year from 2034 to 2043 and 0.8 million per year from 2044 to 2053. This decline is attributed to a slowdown in population growth, an aging demographic, and a return of immigration levels to historical norms." Immigration and Age are the two key factors, although economic factors such as interest rates, mortgage rates, and loan standards -- as well as construction costs -- also play an important role. Demographic shift is also a vital issue (see above chart): as the population ages, the number of deaths rise, slowing the growth of the adult population. By the 2040s, net immigration is projected to contribute almost as much to the demand for new housing as domestic population growth, marking a significant shift from past trends. The report notes that readers should turn to the CBO official website, which "provides valuable insights for policymakers, economists, and stakeholders in the housing industry as they navigate the evolving landscape of U.S. housing starts." Conclusions: Housing costs are sure to drop beginning in the early 2030s (5 years hence), as the need for housing decreases with the senior demographic decline. The lowering immigration numbers will further add to the lowering of need and the lowering of housing prices. With this upcoming decline in mind, do we really want to put in place a policy that is sure to lead to demolitions, plus the removal of key parts of our mature tree canopy? Other recent studies of interest include: Navigating the Future: AI and the Transformation of Investment Management in 2025 | The New Real Estate Frontier: Enhancing CX with Tech and Loyalty | The Outlook for Housing Starts: A Future Defined by Demographics and Demand | 2025: A Transformative Year for the AEC/O Industry | Commercial Real Estate Trends: A 2025 Transformation | Housing Market Predictions for 2025: What You Need to Know | Predictive Analytics: Transforming Commercial Real Estate
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