The most significant factors
impacting housing over the coming years are whether aging baby boomers decide
to grow old where they are and where young immigrants decide to settle, according
to a new study released today by the Mortgage Bankers Association.
The study, “America’s Regional Demographics in the
‘00s Decade: The Role of Seniors, Boomers and New Minorities,” conducted
by William H. Frey of the Brookings Institution and sponsored by the MBA’s
Research Institute for Housing America (RIHA), analyzes two components driving
the changes that will transform the U.S. population over the next several decades
— aging boomers, and immigration of Hispanics and Asians.
It finds that the overall U.S. population will experience a
rapid aging as boomers grow older, while absorbing large numbers of young recent
immigrants. Different regions of the country will have different demands for
housing driven by the relative impacts of aging in place versus migration within
the country and immigration from abroad. For example, suburban areas will gray
faster than urban areas due to the boomers aging in place.
“It has been said that demographics are the future that
has already happened and demographic changes are one of the most powerful forces
impacting the residential and commercial real estate and real estate finance
markets. Therefore the real estate industry needs to appreciate these important
trends. This study provides insightful analyses of current statistics and valuable
projections regarding how these trends will likely play out nationally and regionally
in the years ahead,” said Doug Duncan, MBA’s Chief Economist and
Senior Vice President of Research and Business Development. “We expect
that this study will help our members develop business plans to meet the ever
changing American marketplace.”
Key findings from the study include:
Regional Differences in Aging Patterns
• Senior populations can increase through in-migration
or through aging in place. However, aging in place is the dominant force that
will shape demographic changes in the years ahead.
• Even in Arizona, which shows the highest rates of net
in-migration, the migration effect is dwarfed by the effect of the existing
population simply getting older and not moving.
• The most dramatic impact of aging in place will be in
parts of the country which are not now associated with aging populations, like
Nevada, Colorado, or Georgia. These states that will exhibit the fastest senior
growth are not necessarily the ones that have the highest percentage of seniors.
States with high senior shares have typically experienced one or more decades
of sustained declines in their younger populations. This leaves behind seniors
who are far less likely to move than people in their 20s and 30s.
• Suburbs will be the fastest graying part of our national
landscape. In projections of Philadelphia and Chicago, for example, suburbs
will begin to age faster than cities, even though both cities start out having
older populations than their suburbs.
• While close to 30 percent of young households move each
year to a new residence that percentage slides down to the 4–5 percent
range for people in older age groups. Therefore, household mobility that has
been a major driver of home sales will fall off as boomers age.
• Less than 2 percent of residents aged 55–64 move
across state lines in any one year and the percentage is even less for those
over 65. The aggregate number of interstate moves among those aged 55 and over
is dwarfed by the number of moves undertaken by the younger population, meaning
fewer moves as a larger portion of the population is over 55.
• Well-off young senior populations will emerge in areas
like Las Vegas, NV, Denver, CO, Dallas, TX and Atlanta, GA.
Greater Dispersion of Minorities
• While it is popular to think of the United States as
a melting pot, Hispanic, Asian and other minority groups are disproportionately
clustered in selected areas.
• What has changed is the ‘hold’ that the
traditional immigrant gateways have on the Hispanic population. In 1990, the
top 10 metropolitan areas were home to fully 55 percent of all US Hispanics,
and the top 2, Los Angeles and New York, housed nearly 3 in 10 Hispanics nationwide.
In 2005, however, less than half of all Hispanics live in the top 10 areas and
Los Angeles and New York are home to only 22 percent. When one examines the
far reaches of Hispanic dispersion nearly one third of all counties in the United
States have at least 5 percent of their populations that are Hispanic, compared
with one out of 6 in 1990.
• The vast majority of Hispanics and Asians speak English
at home, and those that do not, can communicate in English very well.
• These new minorities are also relatively young compared
with the rest of the population, suggesting that racial generation gaps are
emerging in areas where they live in large numbers. That is, young adults up
to age 40 in these areas, show a strong representation of new Hispanic and Asian
households, whereas the ‘over 40’ crowd is still dominated heavily
by white and black baby boomers.
• Minorities tend to be younger and as such are highly
mobile. Four out of 10 young Hispanics or blacks changed residence over the
2004–05 period. Nearly one out of 10 Hispanics, and more than one out
of seven Asian movers, came directly from abroad.
• Overall, 15 of the nation’s 88 large metropolitan
areas have majority minority populations.
New Regions Defined by Demographic Changes
• “New Minority States” where Asians and Hispanics
currently account for about 1/3 of the population. (NY, NJ, FL, IL, TX, NM,
AZ, NV, and CA)
• “Faster Growing States” contain many suburban
communities and attract migration from the rest of the country as well as from
recent immigrants. This group of states will have the highest rate of growth
for the 55 and over population. (NH, MD, VA, NC, SC, GA, TN, CO, UT, ID, OR,
and WA)
• “White-Black Slower Growing States” and
“Mostly White Slower Growing States” will have the lowest rate of
overall population growth, but will gray rapidly through aging in place, and
will have the highest shares of seniors. (OH, MI, AL, MS, LA, AR, MO, DC, ME,
VT, MA, CT, RI, PA, WV, KY, IN, MN, WI, IA, ND, SD, NE, OK, KS, WY, MT)
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