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High School Years and Future Housing Demand

From a parent’s point of view, teenagers never listen. From a teenager’s point of view, parents are not cool and are plainly immature.  There is as nothing as exhilarating as living the fast times at Ridgemont High and taking a slack-day off like Ferris Bueller. Being Mean Girls for a few years can also be a lot of fun.

From the housing market perspective, however, today’s high schoolers are the near-future source of housing demand – though mostly for rental and college dorms. Recent data trends on the population count of those aged 15-to-19 suggest a steady rise in rental demand, comparable to the spurt that occurred in the late 1960s and 1970s.

Rising rental housing demand should lead to builders constructing more multifamily rental units. That is exactly what the builders did in the late 1960s and 1970s. However, the  rising level of high-schoolers in the recent past has not yet led to higher multifamily unit housing starts. Perhaps the demand is just around the corner.

From society’s point of view, an expansion in teenage population can present a challenge to social order. If there is not enough of an adult population to supervise, then it just may – and I am emphasizing the word may and not using the word will – cause a ‘social revolution.’ Each generation holds a different set of values. Teens of today cannot be compared to the teenage years of our grandparents. If teenagers make up a larger share of population, then things can become a bit difficult. In the U.S. from the 1960s on, the teenage population share in relation to the adult population (those aged 20 or higher) began to rise and created an increase in teen population until about 1980. Though there are constant changes from year to year in many social dimensions, most would agree that the fundamental change in pop culture occurred in the 1960s and 1970s, coinciding with the teenage population hike.

Fortunately, though, this time around, the rise in teenage population is being matched by a rise in adult population. Therefore, the percentage share of the teenage population will be very manageable at 10 percent, which suggests that there’s not likely to be a social revolution ahead. Only the rental housing demand will rise in the near term, and homeownership demand in the longer-term, as teenagers eventually grow into responsible citizens.

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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Comments
  1. Quite interesting read here, Lawrence! As well as your correlation regarding the rising number of teens and rental demand. And yes, we have home buyers in their making as well. Keep up the good work here at NAR!