At a recent conference, several experts talked about how two demographic groups are influential for American housing trends in the coming years:
Most of the country’s population growth is happening in minority populations – the same groups hit the hardest by the housing downturn in terms of lost household wealth and declines in homeownership rates.
“That is where housing issues will be addressed or not addressed,” demographer Steve Murdock of Rice University said. “Hispanics are the key to this growth.”
And echo boomers – members of another group hit hard by the recession as they’ve struggled to start careers – will be the generation driving the next wave of household formation.
“In the next 10 years, the echo boomers are almost the entire story,” said Rolf Pendall, director of the Urban Institute’s Metropolitan Housing & Communities Policy Center…
Cisneros said a Hispanic affinity for owning a home may help moderate some of the drive toward renting. “Somewhere deep in our DNA as Latinos is homeownership,” Cisneros said.
Baby boomers, the group that’s long driven trends, still is doing so, but instead of creating McMansions, they will start to influence building of nursing homes.
I assume Cisneros, former secretary of Housing and Urban Development under Bill Clinton, means that Latinos have a cultural affinity for homeownership. Thus far, this has not happened so much in the United States: for example, in 2008 the homeownership rate for Latinos was 48.9% and 47.5% for blacks compared to 74.9%. However, in Mexico, the homeownership rate is between 80-90% (2004 figures here, 1999 figures here).
Add this to suggestions from some that Generation Y also wants new kinds of housing (previous posts here, here, and here) and it looks like there might be quite a bit of change in the American housing market in the future. Our current system isn’t too different in houses and layout than it was decades ago.