Monthly Archive November 17, 2020

Houses Continue To Grow Larger Even As Families Are Smaller

The size of homes in America on average are growing larger by square footage. Occasionally, the average news consumer may hear a story about the “tiny house revolution“. This is a movement of people who live in homes that are shockingly small. This movement has appealed in some fashion to the millennial age demographic, but not nearly as much as some might lead you to believe. The stronger trend is for people to purchase larger and larger homes even as family sizes get smaller.

Colliding Trends
There are some interesting colliding trends in the idea that families are getting smaller while homes are getting larger. On the one hand, young people are trending towards having smaller families or opting to not have children at all. An economic squeeze on the millennial generation has made many of them consider putting off having a family or foregoing one. They have a combination of crushing student loan debt and wages that have not gone up on an inflation-adjusted basis in many decades at this point.

The other set of trends is that many people are retiring every single day. Current estimates put the number at approximately 10,000 people retiring on a daily basis in the United States. Those people often have more free capital to purchase their dream home.

Which Trend Will Give In First
It is difficult to say with certainty which trend will give way to the other. It could remain a generational divide. A lot of the older generation may continue to purchase their over sized homes while younger people either choose to rent or purchase smaller homes that they can afford.

The trend among young people towards renting has only continued to grow as they don’t necessarily even see the value in buying a home outright. If this keeps up, then there could be a glut of homes on the market that could eventually force prices down. Perhaps at that point it will become economically possible for at least millennials to purchase a home. It will be interesting to see how these market dynamics play themselves out.