What factors are fueling strong housing demand?


But even housing-industry executives -- typically an optimistic lot -- were taken aback when the government reported last week that home-building activity has accelerated.

...All this building raises a natural question: Why does the U.S. need so much new housing?

...First and foremost, the demand for housing reflects two key demographic trends -- new household formations and immigration. Economists at Harvard University's Joint Center for Housing Studies believe that household formations in the current decade will outpace formations during the 1990s, when they estimate that 12.5 million households were formed. Growth has been due in part to many Gen Xers establishing households at younger ages than even their baby-boomer parents did. Over the next 10 years, the Joint Center estimates that between 13.4 million and 14.5 million new households will be formed, depending on the level of immigration.

It is no secret that home builders have been putting up houses at a furious pace. But even housing-industry executives -- typically an optimistic lot -- were taken aback when the government reported last week that home-building activity has accelerated.

...

All this building raises a natural question: Why does the U.S. need so much new housing?

The simple answer, of course, is rising demand. But what is behind the demand is worth considering. First and foremost, the demand for housing reflects two key demographic trends -- new household formations and immigration. Economists at Harvard University's Joint Center for Housing Studies believe that household formations in the current decade will outpace formations during the 1990s, when they estimate that 12.5 million households were formed. Growth has been due in part to many Gen Xers establishing households at younger ages than even their baby-boomer parents did. Over the next 10 years, the Joint Center estimates that between 13.4 million and 14.5 million new households will be formed, depending on the level of immigration.

From the Realestatejournal .

Posted: Tue - March 22, 2005 at 02:30 PM         |

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