Robert Freedman is the former director of multimedia communications at NAR.
The New Baby Boom
Population gains bode well for home sales.
March 1, 2008
Economists can argue about the short-term prospects of home sales as consumers ponder the best time to buy. But there’s little doubt among analysts about the market’s long-term prospects.
The United States is adding one person every 13 seconds. At the start of 2008, the country had surpassed 303 million residents, almost 3 million more than it had at the start of 2007, the Census Bureau says.
One of the driving forces of this increase is a rise in the U.S. birth rate, now the highest it’s been in more than 40 years, according to an Associated Press review of births dating back to 1909. Fueling the births are higher rates for immigrant households, particularly Hispanics.
For real estate professionals, the country’s continuing strong growth is a good sign in today’s challenging times. “With a population increase of 3 million, household formation typically expands by up to 1.5 million,” says NAR Chief Economist Lawrence Yun.
And because new household formation is the critical first step toward home ownership, the population gains point to robust demand in the years ahead, especially since a significant portion of the increase is fueled by immigrants, who arrive at the rate of one every 30 seconds, the Census Bureau says.
Immigrant households have the highest home ownership rates of all demographic groups, according to a study released last year by the Homeownership Alliance. After immigrant households have been in the country for 30 years, their rate of home ownership rises to just below 75 percent.
For Yun, the Census Bureau figures suggest demand for housing will rise. Last year, new household formation totaled only 650,000 units, about half the historical norm. “Many people have evidently doubled up with roommates or have moved back in with family,” he says. Markets should see more demand once consumer confidence is restored.
A Growing Need for Housing
U.S. population as of Jan. 1, 2008: 303,146,284
Percent change from Jan. 1, 2007: +0.9
Rate of U.S. births: 1 every 8 seconds
Rate of U.S. deaths: 1 every 11 seconds
Rate of international migration to U.S.: 1 every 30 seconds
Total rate of U.S. growth: 1 every 13 seconds
Source: U.S. Census Bureau
Updated: October 22, 2020