Below is a brief transcription and chart from today's edition of The Macro Show hosted by Housing analyst Josh Steiner:
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This is simple demographics 101. This is how many Americans there are at each point on the age continuum. Right now, there are between 4.3 and 4.4 million 32 to 33 year olds. Meanwhile, there are about 4.8 million 26 and 27 year olds. The reason we call this out is that is because those are the age ranges that people buy their first homes on average and rent their first homes on average respectively. You tend to rent your first home at 26/27 and buy your first home at 32/33. The reason this chart matters is two fold. Right now, we're basically at peak renter. The number of Millennials coming up in the ranks is smaller than there are 26/27 year olds now. So that is going to basically reduce the demand growth rate for rentals across the country over the next several years. Meanwhile on the home purchase side you have exactly the opposite. You have an increasing number of people moving into the age range where they buy their first home. That’s going to increase demand for first time home purchases where supply is incredibly tight right now. That’s very good news longer-term for homebuilders as demand increases over the next several years. |
