While the majority of single-family and multifamily home construction is in “millennial counties”, or geographic areas where at least a quarter of the population was born between 1981 and 1997, entry-level home construction in these areas has not kept pace with millennials’ household formation rates and demand.
These millennial-dense areas account for 62% of the entire U.S. population, but only 59% of new home construction, according to the National Association of Home Builders’ Home Building Geography Index. “On the surface, these numbers look similar, but you would expect the single-family construction share to be higher in millennial intensive areas, which tend to feature greater amounts of household formation and population growth that require additional housing,” said NAHB Chief Economist Robert Dietz.
…The shortage of homes for sale is most acute on the lower end of the market, where millennial demand is highest. That has caused home prices to overheat in that category, while prices are actually moderating in the move-up and luxury markets.
