In a recent press release issued by the National Multifamily Housing Council and the National Apartment Association, 4.6M new apartment homes will need to be constructed in the U.S. by 2030 to keep pace with current and future demands. Currently, there are close to 39M apartment residents, exceeding industry capacity.
- “In the past five years, an average of one million new renter households were formed every year, which is a record amount.
- It will take building an average of at least 325,000 new apartment homes every year to meet demand; yet, on average, just 244,000 apartments were delivered from 2012 through 2016.”
What led to this increased demand? It’s a perfect storm brewing in the multifamily industry, combining factors that include aging population, population growth through immigration, and a decline in home purchases.
New lifestyle trends reflect new demands. Not as many people are buying homes and those that typically buy are doing so later in life. “We’re experiencing fundamental shifts in our housing dynamics, as more people are moving away from buying houses and choosing apartments instead. More than 75 million people between 18 and 34 years old are entering the housing market, primarily as renters,” said Dr. Norm Miller, Principle at Hoyt Advisory Services and Professor of Real Estate at the University of San Diego. “Apartment rentals are on the rise, and this trend is expected to continue at least through 2030, which means we’ll need millions of new apartments in the U.S. to meet the increased demand.”
Aging also has a significant impact on the increased need for apartment housing. “People ages 65-plus will account for a large part of population growth going forward across all states. The research shows older renters are helping to drive future apartment demand, particularly in the northeast, where renters ages 55-plus will account for more than 30 percent of rental households.”
Building regulations and the amount of land available for development are just some of the challenges the U.S. apartment market is facing. Multifamily industry leaders are looking for ways to work with government policy makers to “lower barriers to development and better address the current and future housing shortage.”
For further information, visit www.WeAreApartments.org.