According to a recent study from the Joint Center for Housing Studies of Harvard University, household growth in the coming years is projected to slow significantly, which would have a notable impact on housing demand.
JCHS projections show household growth in the U.S. would slow to 8.6 million (approximately 860,000/year) between 2025 and 2035, down from 11.2 million in the 2000s and 10.1 million in the 2010s.
If the trend continues, the projections show household growth between 2035-2045 would decline to just 5.1 million, which would be the lowest of any decade in the last 100 years. These projections are based on immigration levels remaining similar to those of the past three decades.
A major implication of the slowing growth would be declining demand for new housing. Household growth is the largest source of demand for new homes. The projected slowdown would reduce demand for new construction from the current rate of 1.4 million homes to an average of 1.1 million per year between 2025-2035 and 800,000 per year between 2035-2045.
However, a key component of housing demand is the formation of households among young adults (aged 25-34). In early 2024, NAHB examined Census data that showed in the post-COVID period, the share of young people living with parents had been declining. As of 2022, that share had fallen to a decade low — a promising trend signaling sustained housing demand in the years to come.
Further NAHB analysis recently examined which areas of the country have the highest and lowest shares of young adults living with their parents. Although the overall shares show a decline, this demographic continues to face myriad housing affordability challenges, particularly elevated home prices and increased costs of living. (Source)
