Printer Friendly


 WASHINGTON, March 1 /PRNewswire/ -- The aging of the baby boom generation will have a positive impact on housing demand through the turn of the century, according to research sponsored by the Herbert U. Nelson memorial fund of the National Association of Realtors.
 The report, "The Effects of Demographics on Future House Prices," was written by Dr. Dowell Myers and John R. Pitkin of the University of Southern California. It found that as the baby boom population grows older, people in that age group will continue to buy homes, resulting in steady sales and stable home values throughout the next decade. The study refutes reports predicting that home purchases by baby boomers will taper off as the generation grows older, thus forcing real home prices to decline.
 According NAR President William S. Chee, as baby boomers grow older, their housing needs will continue to change, causing an actual increase in housing demand and in home prices. "Baby boomers will not stop buying homes just because they are growing older," Chee said. "There will be an ongoing need to meet vastly diverse housing requirements -- for affluent trade-up couples, baby boomers approaching retirement, and growing numbers of non-traditional households. We are looking for many years of steady growth in the residential sector."
 The report contends that shifts in population composition, not just population growth, often drive change in housing demand. "Rapid population change may alter both the consumption preferences and the effective demand of the total population," the study says.
 The report evaluates the housing consumption of cohorts -- people who are born in certain time periods and then move through age groups as they grow older. The study notes that measures of life cycle changes in housing demand, derived by tracking generations of Americans over a 30- year time span, provide a sound basis for forecasting future activity.
 It tracked the home buying patterns of the same group over different periods of time, and found that, regardless of age, home expenditures increased at the end of each time period. "At least since 1960, per capita housing consumption has, on average, increased for all cohorts in the United States as they have aged beyond 45 to at least age 70," Dr. Myers says.
 Based on the performance of their predecessors, cohorts in the baby boom generation will continue to create activity in housing markets for years to come. "The importance of this finding is its implication for the future impact on the housing market of the large baby boom generation. This group has matured from the young ages when they newly entered the housing market (aged 16 to 34 in 1980), and is proceeding to a mature housing market status (reaching age 44 in 1990 age 54 in 2000, and age 64 in 2010)," the report says.
 The study projects that per capita housing consumption for the oldest members of the baby boom generation will not even start to fall off until after 2015 (when they reach 70).
 According to NAR's Chief Economist John A. Tuccillo, the research counters "doomsday" reports claiming home values will drop due to the smaller size of the generation following the baby boom group. Such dire predictions are too simplistic, and fail to consider the continuing impact the baby boom generation will have, Tuccillo said.
 "As the leading edge of the baby boom moves through its peak earning years, demand will pick up for second homes and retirement homes," Tuccillo said. Additionally, some baby boomers previously unable to purchase homes will be buying, he noted.
 Increased savings by baby boomers, combined with a larger Social Security trust fund and what likely will be a smaller federal deficit, will keep interest rates low over the next several years, Tuccillo added.
 The report concludes that the long-lasting impact of baby boom home buyers will offset any drop in young households entering the housing market. "The baby boom generation will have a continued positive effect on future house values," it says.
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 750,000 members involved in all aspects of the real estate industry.
 -0- 3/1/93
 /NOTE: Copies of the report are free to the media. A copy can be obtained by calling one of the contacts listed below of NAR's public affairs division./
 /CONTACT: Trisha Morris, 202-383-7560 or Liz Duncan, 202-383-1043, both of the National Association of Realtors/

CO: National Association of Realtors ST: District of Columbia IN: SU: ECO


IH -- DC005 -- 1219 03/01/93 08:46 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 1, 1993

Related Articles
The boomers are coming--and bringing their spending power.
The boomer boost: aging baby boomers are a key demographic force driving up demand for housing. This huge group--77 million strong--has played a...
Lending strategies to meet the growing needs of multifamily investment.
Office market will be 'standout performer' in short and long term.
Mixed signals mark rental housing market.
Baby Boomers boasting new influence over real estate.
Nobel nominee says Boomers to blame for recession.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters