Young adults drove the strong rebound in multifamily construction from 2007 to 2013, but now the baby boomers are taking the reins.
Older adults – those aged 50 to 59 – have accounted for the biggest increase in occupancy from 2000 to 2013, according to a recent presentation by Jordan Rappaport, senior economist of the Federal Reserve Bank of Kansas City, during the REALTOR® University Speaker Series.
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Rappaport noted that from 2000 to 2013 there was no net increase in demand from young adults in apartments. However, older adults have accounted for most of the increase in multifamily occupancy of nearly 2.6 million units from 2000 to 2013.
The trend is expected to only get bigger. From 2015 to 2030, 26 million baby boomers are projected to turn 70 years old, when the downsizing trend tends to accelerate.
Rappapport projects that baby boomers will help to continue to fuel demand for multifamily units over the next decade, which likely will peak to about half a million per year in 2018 and 2020.
Source: “Strong Demand From Baby Boomers to Continue to Drive Multifamily Home Construction,” National Association of REALTORS® Economists’ Outlook blog (Sept. 22, 2015)