According to a new study commissioned by the National Multifamily Housing Council and the National Apartment Association, delayed marriages, an aging population and international immigration are increasing a pressing need for new apartments in the U.S., to the tune of 4.6 million by 2030. It’s important to note that:
- Currently, nearly 39 million people live in apartments, and the apartment industry is quickly exceeding capacity;
- In the past five years, an average of one million new renter households were formed every year, which is a record amount; and,
- It will take building an average of at least 325,000 new apartment homes every year to meet demand; yet, on average, just 244,000 apartments were delivered from 2012 through 2016.
The increased demand for apartments is due in large part to:
- Delayed house purchases. Life events such as marriage and children are the biggest drivers of home ownership. In 1960, 44 percent of all households in the U.S. were married couples with children. Today, it’s less than one in five (19 percent), and this trend is expected to continue.
- The aging population. People ages 65-plus will account for a large part of population growth going forward across all states. The research shows older renters are helping to drive future apartment demand, particularly in the northeast, where renters ages 55-plus will account for more than 30 percent of rental households.
- Immigration. International immigration is assumed to account for approximately half (51 percent) of all new population growth in the U.S., with higher growth expected in the nation’s border states. This population increase will contribute to the rising demand for apartments. Research has shown that immigrants have a higher propensity to rent and typically rent for longer periods of time.
Other highlights from the report include:
- Demand is expected to be especially significant in Raleigh, N.C., with a 69.1 percent increase in new apartment units between now and 2030, Orlando, Fla. (56.7 percent), and Austin, Texas (48.7 percent). Also notable, the demand in the New York City metro area will call for an additional 278,634 apartment units, Dallas-Ft. Worth, Texas (266,296 new units), and Houston, Texas (214,176 new units).
- Propensity to rent is higher in high-growth and high-cost states.
- Hundreds of thousands of new rental units will be needed by 2030 in states such as California, Georgia, Arizona, Florida, North Carolina, Nevada, New York, Texas, Virginia and Washington.