Study identifies areas of fastest growth, aging

WASHINGTON – Dec. 1, 2006 – The most significant factors affecting housing during the coming years will be whether aging baby boomers decide to grow old where they are and where young immigrants decide to settle, according to a new study released yesterday by the Mortgage Bankers Association (MBA).

William H. Frey of the Brookings Institution conducted the study for MBA’s Research Institute for Housing America (RIHA). The report finds that the overall U.S. population will experience a rapid aging as boomers grow older, while absorbing large numbers of young recent immigrants.  Different regions of the country will have different demands for housing driven by the relative impacts of aging in place versus migration within the country and immigration from abroad.  For example, suburban areas will gray faster than urban areas due to the boomers aging in place.

“It has been said that demographics are the future that has already happened, and demographic changes are one of the most powerful forces impacting the residential and commercial real estate and real estate finance markets,” says Doug Duncan, MBA’s chief economist and senior vice president of research and business development. “Therefore, the real estate industry needs to appreciate these important trends. This study provides insightful analyses of current statistics and valuable projections regarding how these trends will likely play out nationally and regionally in the years ahead. We expect that this study will help our members develop business plans to meet the ever changing American marketplace.”

Key findings from the study include:

States with the fastest senior growth are not necessarily the ones that now have the highest percentage of seniors. Instead, they will be states where there is currently a younger population that will choose to grow old in place. Well-off young senior populations will emerge in areas like Las Vegas, Denver, Dallas, and Atlanta.

Suburbs in cities like Philadelphia and Chicago will age the fastest because younger residents are abandoning them.

Household mobility that has been a major driver of home sales will fall off as baby boomers choose to age in place.

The study identifies “New Minority States,” where Asians and Hispanics currently account for about one-third of the population are New York, New Jersey, Florida, Illinois, Texas, New Mexico, Arizona, Nevada and California.

“Faster Growing States” contain many suburban communities and attract migration from the rest of the country as well recent immigrants. This group of states will have the highest rate of growth for the 55 and older population. These states are New Hampshire, Maryland, Virginia, North and South Carolina, Georgia, Tennessee, Colorado, Utah, Idaho, Oregon and Washington.

As defined by the study, “White-Black Slower Growing States” and “Mostly White Slower Growing States” will have the lowest rate of overall population growth, but will gray rapidly through aging in place, and will have the highest shares of seniors. They are Ohio, Michigan, Alabama, Mississippi, Louisiana, Arkansas, Missouri, Washington, D.C., Maine, Vermont, Connecticut, Rhode Island, Pennsylvania, West Virginia, Kentucky, Indiana, Minnesota, Wisconsin, Iowa, North and South Dakota, Nebraska, Kansas, Wyoming, and Montana.

To obtain a copy of the report, go to the RIHA website at: http://housingamerica.org/docs/6694_00Demographics_WP_WB.pdf

© 2006 FLORIDA ASSOCIATION OF REALTORS

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