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The demographic shift from single-family to multifamily housing

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  • Jordan Rappaport

Abstract

The crash of the U.S. housing market triggered the worst U.S. recession since the 1930s. Beginning in late 2009, multifamily construction rebounded strongly. Beginning in mid-2011, single-family construction began to rebound as well. But during the first half of 2013, growth of both types of construction paused. Rappaport examines the demographic forces shaping demand for residential construction. At the end of 2012, the number of occupied single-family housing units was moderately below its demographic trend level and the number of occupied multifamily housing units was considerably below its demographic trend level. Hence residential construction of both types is likely to pick up in the near future. Over the longer term, slowing U.S. population growth is likely to put downward pressure on both types of construction. Downsizing by aging baby boomers will exacerbate this downward pressure on single-family construction but offset it for multifamily construction. Hence the long-term outlook is considerably stronger for multifamily construction.

Suggested Citation

  • Jordan Rappaport, 2013. "The demographic shift from single-family to multifamily housing," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 29-58.
    • Handle: RePEc:fip:fedker:00004
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    File URL: https://www.kansascityfed.org/documents/932/2013-The%20Demographic%20Shift%20From%20Single-Family%20to%20Multifamily%20Housing.pdf
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    References listed on IDEAS

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    1. Rappaport, Jordan, 2008. "A productivity model of city crowdedness," Journal of Urban Economics, Elsevier, vol. 63(2), pages 715-722, March.
    2. Edward L. Glaeser & Joseph Gyourko, 2005. "Urban Decline and Durable Housing," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 345-375, April.
    3. Glaeser, Edward L & Gyourko, Joseph & Saks, Raven, 2005. "Why Is Manhattan So Expensive? Regulation and the Rise in Housing Prices," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 331-369, October.
    4. Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
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    Cited by:

    1. Jeffrey P. Cohen & Cletus C. Coughlin & Vincent W. Yao, 2016. "Sales of Distressed Residential Property: What Have We Learned from Recent Research?," Review, Federal Reserve Bank of St. Louis, vol. 98(3), pages 159-188.
    2. Jordan Rappaport, 2015. "Millennials, baby boomers, and rebounding multifamily home construction," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 37-55.

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