WASHINGTON, DC — The next two decades in housing markets, including the look and feel of kitchens and bathrooms, will depend largely upon the preferences and hot buttons of “Echo Boomers,” the approximately 62 million people currently aged 17-31.
That was the view of panelists at a conference on housing demographics conducted during the recent National Association of Realtors’ Midyear Legislative Meetings and Trade Expo.
According to the Washington, DC-based NAR, echo boomers, also called “millennials,” represent 31% of all recent home purchases and many of those young people aspire to homeownership.
“Demography is destiny,” said NAR Chief Economist Lawrence Yun. “Certain generational shifts will have a significant impact on the real estate industry over the next two decades.”
NAR Economist Selma Hepp identified several key demographic trends on both ends of the housing age spectrum. The demand for affordable, accessible housing will increase as the 65-and-over population grows, Hepp said. At the same time, as seniors leave their homes and move into assisted living and other arrangements, they will add to the current supply of housing. Because of the sheer size of this demographic, however, echo boomers will significantly impact the next two decades in housing, Hepp noted.
“Echo boomers represent a long-term opportunity for a housing market recovery, but they are struggling in the current economic crisis,” Hepp said. “Consequently, demand for rental housing is likely to climb in the near term.”
As a group, echo boomers are more racially and ethnically diverse than their baby boomer parents. While 65% of baby boomers are Caucasian, only 55% of echo boomers are Caucasian. Echo boomers are also more likely to be college educated than previous generations, and are remaining single long-er. According to the Research Institute for Cooking & Kitchen Intelligence (RICKI), Echo Boomers are also more likely than any other population cohort to undertake kitchen remodeling in the next 12 months.
In a presentation at the Kitchen Cabinet Manufacturers Association’s annual convention last month, RICKI’s executive director Brenda Bryan said that this technologically focused demographic cohort is far more likely than older consumers to use social media sites, smart phones and food- and kitchen-related apps. They are also more likely than other age groups, Bryan said, “to view the kitchen as a hangout,” and to have a distinct preference for modern/contemporary styling.
According to Glenn Crenlin of the Runstad Center for Real Estate Studies at the University of Washington, “it is worrying that the homeownership rate for those under 35 has fallen more sharply than the rate for older Americans.” However, Crenlin said, analysts should examine homeownership rates by generation “in a more balanced way.
“Although the Millennial generation does not own homes at the same percentages of those in other generations, many of them are still in the early stages of household formation – in fact, some of them are still in high school,” he said.
Crenlin presented data that revealed a significant increase in homeownership among millennials when compared to baby boomers at the same age. While 900,000 households in the millennial generation own their own home, only 500,000 baby boomer households owned their own homes at the same point in their lives.
“What we’re looking at in terms of the millennial generation is likely only a delay in homeownership of three to five years, not a long-term trend away from homeownership itself,” Crenlin said.