Nick Gerli, CEO and founder of the real estate analytics firm Reventure Consulting, has posted another informative housing-market update on X. This time, he outlines how a major demographic turning point will reshape housing demand and even the size of homes people will want.
By 2032, Gerli pointed out that deaths will exceed births in the U.S., and this crossover point - four decades in the making - will have significant implications on the housing market, including:
structurally lower homebuyer demand, as declining births and family formation lowers the need and urgency for young people to buy houses
more inventory, as incrementally more deaths and the aging out of the Baby Boomer generation increases listings (Freddie Mac estimates 9 million homes by 2035).
"This will likely have a disinflationary and/or deflationary impact on home prices over the long-term," Gerli said.
He noted this trend will ultimately lead to "fewer children will invariably lead to lower homebuyer demand, and more renter demand."
He said this will ultimately lead to "an increase in the demand for other types of houses to buy — such as smaller ranch-style homes and starter homes," adding that "McMansion-style neighborhoods probably won't fare as well based on current demographic trends."
Gerli hedged his outlook with this...
He did not mention the open border invasion of tens of millions of migrants and their impact on the housing market.
Also, we pointed out the other week that multigenerational living has surged to a record high as families increasingly combine households to cope with elevated inflation after the Biden-Harris regime years, effectively pooling more resources under one roof (read the report).
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