How Demography Plays Into Housing Supply Shortage

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September 21, 2015

One not often discussed reason for the shortage of housing supply is demographics, writes Dan McCue, senior research associate at the Joint Center for Housing Studies.

“Indeed, the ongoing generational shift among American households has slowed sales in the short run and is likely to continue to dampen sales over the next two decades,” he writes.

For example, members of generation-X are sandwiched between two of the largest generations so far—Baby Boomers and Millennials—which means there are fewer households from this age group to sell to.

Moreover, this generation group has a lower homeownership rate compared to the other generations. “Fewer current homeowners in this key age group has meant fewer potential trade-up buyers and sellers, meaning fewer people putting their homes on the market, adding to tight inventories of for-sale homes,” McCue writes.

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