The Demographic Transition from Single-Family to Multifamily Housing

Economic Review, 4th Quarter 2013

30 Pages Posted: 16 Jan 2014

See all articles by Jordan Rappaport

Jordan Rappaport

Federal Reserve Bank of Kansas City

Date Written: December 20, 2013

Abstract

This article examines forces underlying the housing recovery to determine when sustained construction growth will resume. The analysis suggests that very strong multifamily construction growth is likely to resume by early 2014 and that moderately strong single-family construction growth is likely to resume by early 2015. The longer term outlook is especially positive for multifamily construction, reflecting the aging of the baby boomers and an associated shift in demand from single-family to multifamily housing. By the end of the decade, multifamily construction is likely to peak at a level nearly two-thirds higher than its highest annual level during the 1990s and 2000s. Notwithstanding renewed growth, the level of single-family construction is likely to remain moderate. By the end of the decade, it is likely to peak at a level comparable to what prevailed just prior to the housing boom. Thereafter, single family construction is projected to contract at a moderate rate.

Keywords: Housing Demand, Residential Construction, Demographics, Baby Boom

JEL Classification: R21, J11

Suggested Citation

Rappaport, Jordan, The Demographic Transition from Single-Family to Multifamily Housing (December 20, 2013). Economic Review, 4th Quarter 2013, Available at SSRN: https://ssrn.com/abstract=2378920

Jordan Rappaport (Contact Author)

Federal Reserve Bank of Kansas City ( email )

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United States
816-881-2018 (Phone)
816-881-2199 (Fax)

HOME PAGE: http://www.kansascityfed.org/speechbio/rappaport.cfm

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