What Overbuilding? National Apartment Association Study Says 4.6 Million New Apartments Needed By 20
An exhaustive study from research from Hoyt Advisory Services, commissioned by the National Multifamily Housing Council and the National Apartment Association says that by 2030, United States will need 4.6 million new apartment homes.
The reports finding is based on extensive analysis of population growth including net international immigration, home-ownership, household size, real depreciation and obsolescence, vacant units, among other factors.
Some of the key findings of the report are:
1) Population Growth: The study estimates U.S. population will rise to 357 million by 2030 with net international immigration contributing almost 60% of population growth in 2030.
2) U.S. Household Size: The report contends that while family size will remain fairly stable at around 3.2 individuals per family, overall household size will fall to 2.4 by 2030 on account of increase in single-individual household on both ends of the age spectrum. Single-person households are expected to make up 30% of all households by 2030 compared to about 25% in 2000.
3) Total Housing Demand (Rented and Owned): Total housing demand is influenced by homelessness, normal vacancy, second/third homes, loss of physical housing units. The study expects that about 159-160 million housing units will be needed by 2030.
4) Home-ownership: The study predicts home-ownerhsip will fall steadily to 60.5% by 2030 from 62.2% in 2016. This drop is attributed to millennial preferences, stricter lending standards, high student loans, and other demographic changes.
5) Rental demand: Based on the above drivers, the study estimates that 4.6 million new apartment units will need to be built by 2030 to meet the anticipated demand. This 4.6 million units are only those units in properties with 5 units or more. The total new rental units needed is expected to be about 8 million if one includes single family homes and properties with fewer than 5-units.
The report can be accessed here.
The press release can be found here.
