The traditional American timeline of marriage, homeownership, and family formation is shifting. Americans are increasingly delaying or opting out of these milestones, impacting the housing market that was once built for a different era. Experts suggest that the next significant challenge for housing may not be affordability but fertility.
Politicians and commentators have raised concerns about America's declining birth rate, viewing it as a threat to the economy and social systems. They urge young Americans to start families, referencing the post-World War II baby boom as an ideal model. During that period, household formation surged with population growth, leading to widespread homeownership and the creation of starter homes.
James Hughes from Rutgers University notes that "GI Joe and Rosie the Riveter got together right after World War II, got married, and births exploded." This led to rapid household formation supported by housing production and policy.
Today, many Americans are part of dual-income households without children. Hughes states, "What we have a lot of today: double income, no kids. … They’re certainly delaying it if they’re going to have children."
As life milestones are delayed, so is household formation. This shift is evident in rental demographics; 72% of U.S. renters are now aged 30 or older—a record high according to John Burns Research & Consulting.
Hughes explains that expensive housing makes it difficult for single people to leave their parents' homes and rent apartments. High costs and limited inventory lead young adults to delay renting and buying.
Net household growth has slowed for two consecutive years. Harvard Joint Center for Housing Studies reports that in 2024, only 1.56 million households were added in the U.S., down from previous years.
The slowdown coincides with rising uncertainty in employment rates, income growth, immigration, and demographics. The end of an immigration surge in early 2025 further complicates population growth prospects.
Demographic challenges intensify as baby boomers begin turning 80 this year. Without increased immigration, Elliott suggests more deaths than births could occur by 2029.
Hughes concurs: “If there is no immigration, eventually the population and number of households are going to contract.”
Older adults represent the fastest-growing housing segment, raising questions about whether current housing supply meets future needs.
Regional differences also exist; Hughes points out that "the Northeast and the Midwest regions are the demographic laggards [compared with] the South and the West … who have been the recipients of migration."
Builders face evolving demand due to later household formation and shrinking family sizes. Hughes believes contraction is distant but acknowledges demand will shift toward different types of housing.
The challenge lies not just in building more homes but creating suitable ones for a slower-growth America where buyers emerge later with diverse needs.
