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Issue Papers on Demographic Trends Important to Housing

Report Acceptance Date: 
February 2003 (154 pages)
Posted Date:   
February 1, 2003

The U.S. Department of Housing and Urban Development has commissioned three papers on demographic trends important to housing in order to better understand how these trends will shape both housing demand and supply over the coming decade: Issue Paper on the Impact of Immigration for Housing, by Barry Chiswick and Paul Miller; Projections of U.S. Households by Race/Hispanic Origin, Age, Family Type, and Tenure to 2020: A Sensitivity Analysis, by George Masnick and Zhu Xiao Di; How Changes in the Nation's Age and Household Structure will Reshape Housing Demand in the 21st Century, by Martha Farnsworth Riche. These papers review past immigration patterns, how assumptions about future immigration can influence population predictions and current and future trends in households' age and minority compositions, respectively. Collectively, these three papers illustrate that the current demographic profile of the typical American household can be expected to change dramatically over the coming decades.

Barry Chiswick and Paul Miller look at the differences between immigrant and native-born household locations, variations between groups in their housing market participation, and the likely impact of future immigration on the demand for housing in the first paper. George Masnick and Zhu Xiao Di review the potential for growth in the number of households, owners, and renters, including the contribution of past and future immigration to these projections. They use the Potential Housing Demand (PHD) model- developed by researchers at the Joint Center for Housing Studies- to project the number of households and their tenure choice over the next 20 years. In the final paper, Martha Farnsworth Riche discusses the aging population, the growing prevalence of minority households, and the effect these trends may have on housing demand.

As the number of households who are married with no children, minority with children, and elderly households continue to grow proportionally, housing industry participants must analyze their true preferences rather than rely on past assumptions of housing demand. For instance, assuming that the needs of minority households and non-Hispanic white family households are the same would be imprudent. Thus the housing industry cannot assume that the future demand for housing will be the same as in the past. Instead, the housing market must analyze preferences of these emerging households to ensure that supply can indeed adequately meet demand.