Housing Demand Projected to Decline as Population Growth Slows

U.S. housing demand is projected to slow in the coming decades as population growth declines. According to the Joint Center for Housing Studies of Harvard University, household growth is expected to increase by 8.6 million—about 860,000 annually—between 2025 and 2035. That's a slower pace than in previous decades, including the post-Great Recession 2010s. At that time, households grew by 10.1 million. Growth is predicted to decline even further between 2035 and 2045, with just 5.1 million new households, marking the slowest growth in over a century. 

Household growth is the single biggest source of demand for new housing, along with the need to replace older homes, meet the demand for second homes, and accommodate a normal level of vacancies in a larger housing market. The projected slowdown will reduce demand for new unit construction from the current rate of 1.4 million units per year to an average of 1.1 million units per year in 2025–2035 and to 800,000 units per year in 2035–2045 (Figure 4). In the low-immigration scenario, demand would support the construction of just 950,000 new units per year in 2025–2035 and 610,000 per year in 2035–2045. These levels are well below the 1.6 million to 2.1 million units built on average each year from the 1970s through the 2000s, and nearer to the 990,000-unit annual average from the 2010s, which was a historically low decade. Read more