TELEVISION SHOWS OF THE 1950s, such as Leave It to Beaver and Father Knows Best, have etched a singular image of the family into the national consciousness: married couples raising precocious children in the suburbs. But did you know that in 1950, married couples with children made up just 43 percent of all households? Still, in those days married couples with children were the single largest family type. Hence they took center stage in the markets and in the media.
Things began to change in the 1960s, when divorce rates started to climb. But it was not until the 1970s that the pace of change quickened. As divorce rates accelerated and baby boomers delayed getting married and having children longer than any previous generation, the traditional family began to lose share faster.
By 1980, married couples with children made up only 31 percent of all households, down from 40 percent just 10 years earlier. Childless couples accounted for 30 percent of households. By 1990, the traditional family had lost first place as the most prevalent household type to childless couples. Then, over the course of the 1990s, the remarriage rate steadily declined and the median age at first marriage steadily increased. As a result, by the year 2000 people living alone captured second place. Traditional families fell to third place as their share of households dipped below one-quarter for the first time.
No surprise, then, that the image of the traditional family living in manicured suburban homes started to fade as early as the 1970s and was being replaced by a vision of a more diverse America. Fast forward to the 1990s, when almost predictably, sitcom icons of the day would become the singles-centric Seinfeld and Friends.
More changes are in store for the composition of America's households. By the time 2020 rolls around, the traditional family could constitute as few as two in 10 households. Childless couples and people living alone, meanwhile, are on track to account for as many as three in 10 households each as the baby boom ages. The other two in 10 households will be a mix of single parents and unmarried household heads living with related and/or unrelated others.
TRADITION ROCKS What do all these changes mean for new home demand? To answer this question, it is important to recognize that married couples with children constitute a disproportionately large share of the market for consumer goods and services and for new homes.
Although married couples with at least one child under 18 accounted for just less than one-quarter of all households from 2002 to 2003, they accounted for 35 percent of total consumer spending, 39 percent of new home buyers, and a whopping 45 percent of new single-family detached home buyers. And for every $1 spent, on average, by married couples with children, childless couples without children spent 83 cents, single parents spent 53 cents, and singles spent only 48 cents.
Despite their decline, married couples with children are still the largest market for consumer goods and services in general, and for new homes—and especially new detached single-family homes—in particular. Childless couples remain a distant second at 32 percent of all new homes and 34 percent of all new single-family detached homes.
BACK FOR SECONDS For all the talk about the increase in people living alone, in single-parent families, and in the hodgepodge of other household types, these households have not increased their share of new home buyers by that much over the past 15 years. People living alone as a share of new home buyers increased from 12 percent in 1988-1989 to 14 percent in 2002-2003, while the single-parent share fell 1 percent to 6 percent, and the “other” household share held firm at 8 percent.
Moreover, these statistics are from a period when conditions for homeownership were unusually favorable. Under less favorable circumstances, the married couple share is likely to be higher.