How will the declining birth rate impact the move-up housing segment?
Recent generations are starting parenthood later and having fewer children, a factor that could contribute to a shift in housing demand. However, location matters, and migration patterns could also impact the demand for move-up housing. While we recognize that a lower US birth rate may slow housing demand in general, here are three opportunities for the move-up housing segment:
Delayed milestones could signal stronger move-up demand.
Women are having children later in life. In 1990, birth rates were the highest among women aged 25–29. By 2023, women aged 30–34 had the highest birth rate (births per 1,000). The delayed milestone leads to increased demand for move-up housing in some markets since people with more established careers have more accumulated wealth when they have children. Our proprietary Homebuilder Survey indicates builders are seeing equally strong demand for move-up homes vs. entry level, despite the rise in mortgage rates, which has historically led to a shift to entry-level demand.
Migration leads to regional differences.
Despite a lower national birth rate, in-migration within the US is increasing the demand for move-up housing in some markets. Top migration destinations include Dallas, Houston, Myrtle Beach, SC, Charlotte, NC, and Jacksonville, FL. And new residents moving into these markets come from higher-income areas like New York City and Washington, DC. Many are selling existing homes to move up in these hot in-migration markets. The top in-migration markets for Dallas include New York City and Los Angeles, where the median existing home prices are $654K and $930K, respectively. The median existing home price in Dallas is $407K! As an aside, we’re hearing builders doing well with flexible incentive packages instead of straight-rate buydowns that are less enticing to buyers with cash.
Selling your median home in Los Angeles and “trading up” for a large home in Dallas.
Fewer children could mean smaller homes.
Families with fewer children could require less space in a home. We continue to see move-up demand in infill and Surban® locations across the country, and these homes are filled with young professionals with small children. Some great examples of move-up products in good locations include David Weekley’s Park Collection at Nexton and Cadence at Central Park by Brookfield Residential.
We continue to closely monitor US demographics and the impact on housing. For additional insight or local market intelligence, feel free to give us a call or submit a question at dearconsultant@jbrec.com.
