Beyond Demographics, This Fact Will Drive Housing Starts
The median age of owner-occupied homes is 39 years, according to the latest data from the 2019 American Community Survey. Compared to a median age of 31 years in 2005, the U.S. owner-occupied housing stock is aging gradually. The residential construction continues to fall behind in the number of new homes built especially after the Great Recession.
This aging housing stock signals a growing remodeling market, as old structures normally need to add new amenities, or repair/replace old components. Rising home prices also encourage home owners to spend more on home improvement. Moreover, the number of owner households has been rising since the third quarter of 2016. This indicates a strong rising demand for new construction over the long run, as current owner-occupied housing stock is older.
New construction added nearly 5.4 million units to the national stock from 2010 to 2019, accounting for only 7% of owner-occupied housing stock in 2019. Owner-occupied homes constructed between 2000 and 2009 make up 15% of the housing stock. But more than half of the owner-occupied homes were built before 1980, with around 38% built before 1970. Due to modest gains of housing construction, the share of new construction built within past 9 years declined greatly, from 15% in 2006 to only 7% in 2019. Meanwhile, the share of housing stock built 50 year ago or earlier increased significantly from 30% in 2009 to 37% in 2019.