NAHB analysis of U.S. Census Bureau data shows that our country’s housing stock continues to age. The median age of an owner-occupied home has reached 37 years, up from 31 years in 2005. Meanwhile, economists expect millennials to enter the housing market in full force in the near future, driving up demand for reasonably priced homes.
This combination of factors means that we have a prime opportunity to add much-needed housing inventory and remodel older homes for owners who want to stay put. But to do that, we need to ensure we are working in the most optimal business environment to service our customers.
NAHB’s economic analysis of the U.S. Census Bureau’s 2016 American Community Survey found that half of all homes were built before 1980, and nearly 40% were constructed before 1970. The housing stock is aging because new-home production grew modestly in the past decade due to the prolonged impact of the Great Recession. Case in point: the share of new construction has declined in recent years, from 11% of overall inventory in 2006 to only 4% in 2016.
As millennials come into the housing market, we have the chance to add inventory to meet this growing demand. In encouraging news, it seems that younger Americans may prefer to buy a new home. Our analysis found that 70% of homes built after 2010 are owned by people younger than 55, while homes built before 1980 are mostly owned by the baby boomer generation.
The large contingent of American seniors living in older homes also presents opportunities for the remodelers among us, particularly the aging-in-place remodelers. In the near future, we can expect more homeowners to pursue renovation projects that will allow them to live safely and comfortably as they age.
In addition to increased demand for aging-in-place accommodations, there will be a greater focus on retrofitting existing homes to improve resource efficiency. Not only do owners of those older homes want to keep energy expenses in check, today’s new homes are so efficient that widespread retrofitting is essential for the nation to measurably reduce residential energy use.
But for us to build competitively priced homes and do affordable renovations, we need to work in a pro-housing climate. Namely, we need common-sense regulations that do not add significantly to the cost of construction. We need affordable building materials and reliable access to lots and labor.
This is why the association continues to urge government officials to develop sensible rules, to resolve trade disputes that are affecting the price of lumber and other construction materials, and to focus on workforce development programs that help people find rewarding careers in the building trades. Working together with these officials, we can increase and improve the housing stock and make a significant difference in the lives of our consumers.