Concentration of Single-Family Housing 2005 to 2012

In a series of posts, NAHB examined key housing statistics from the 2012 American Community Survey (ACS) for metro areas in the United States. One statistic that drew interest was the share of homeowners living in single-family detached housing. This post expands that analysis by looking at the share of total housing units (owned and rented) from 2005 to 2012.

The share of single-family detached housing is calculated by taking the total number of single-family detached units divided by the total number of housing units. The share of single-family detached housing or single-family concentration gives a snapshot of the housing stock for a specified geography.

At the national level the single-family concentration has changed very little in recent years. According to the ACS, in 2012 the concentration was 61.6% compared 61.1% in 2005.

The small movement in the single-family concentration at the national level is not surprising. The U.S housing stock is aging. According to the latest data from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of an owner-occupied home was 35 years in 2011. The median age reported in the 1985 AHS was only 23 years.

Therefore, if the single-family concentration is not effected in large order by removing housing units, changes are instead the result of the growth in new construction of single-family housing relative multifamily housing. For example, an increase in the single-family concentration is the result of more single-family housing being added than multifamily housing. Conversely, a decrease in the single-family concentration is the result of fewer single-family housing being added than multifamily housing.

Although the single-family concentration showed little movement from 2005 to 2012 at the national level, several metro areas did experience noticeable change. Metro areas with the largest percentage point increase in the single-family concentration from 2005 to 2012 are shown below.

One trait shared by the metro areas in the top ten was above average population growth. From 2005 to 2012, all metro areas in the top ten with the exception of Yakima, WA experienced double digit population growth. The population growth in Auburn-Opelika, AL during the time period was over 24%.

Population growth alone cannot explain the large increases in the single-family concentration. Land use regulation and availability also play a role.  Higher concentrations are typical of locations with less dense developments.

MSAs with the largest percentage point decrease in the single-family concentration from 2005 to 2012 are shown below.

The metro areas in the bottom ten do not share the trait of average population growth. It is worth keeping in mind that population growth can produce a falling single-family concentration, if the growth results in apartments rather than single-family homes. For example for the list above, Greenville, NC experienced population growth over 25% while Victoria, TX experienced population growth of only 1%. Thus, land use regulation and availability play leading roles. Lower concentrations are typical of locations with denser developments.

Although the national figures saw little movement from 2005 to 2012, certain metro areas saw noticeable movement. These figures allow us to examine the relative growth in single-family and multifamily housing units for each metro area.

Top Metro Areas – Owner-Occupied Units Built Since 2000

In a recent study, NAHB examines eight key housing statistics from the 2012 American Community Survey (ACS). This post takes a closer look at one of those statistics; the share of new owner-occupied units.

The share of new owner-occupied units is calculated by taking the total number of owner-occupied housing units built since 2000 divided by the total number of owner-occupied housing units. The number indicates how fast the stock of owner-occupied housing is growing.

The metropolitan area with the highest share of new owner-occupied units is Palm Coast, FL with 46.3%. The Palm Coast figure is well above the national share of new owner-occupied units of 17.0%.

The metropolitan areas with the highest share of new owner-occupied units are scattered from Delaware to Utah.  Three of the ten have a population greater than 1 million while four have a population below 200,000. The demand for new housing depends on factors including population and income growth.

The metropolitan area with the lowest share of new owner-occupied units is Binghamton, NY with 4.2%. Four of the ten metropolitan areas on the list are located in New York.

The relatively low demand for new housing in part reflects an aging population.  The aging population represents a challenge for new home builders in these local metro areas but a significant opportunity of remodelers to meet the needs of a population with an aging housing stock.

• The complete series is provided below.

1. Eye on Housing – Top Ten Metro Areas – Owner Occupied Housing Units
2. Eye on Housing – Top Ten Metro Areas – Homeownership Rate
3. Eye on Housing – Top Ten Metro Areas – Vacancy Rates
4. Eye on Housing – Top Ten Metro Areas – Single-Family Concentration
5. Eye on Housing – Top Ten Metro Areas – Median Income and Home Value
6. Eye on Housing – Top Ten Metro Areas – New Construction

Top Ten Metro Areas – Homeownership Rates

In a recent study, NAHB examines eight key housing statistics from the 2012 American Community Survey (ACS). One statistic is the homeownership rate for all metropolitan (metro) areas in the United States. A metro area is an aggregation of counties that share a local labor and housing market based on commuting patterns. This post lists the ten metro areas with the highest homeownership rates and the ten metro areas with the lowest homeownership rates.

The homeownership rate is calculated by taking the total number of owner-occupied units divided by the total number of occupied units for a chosen geography. Occupied units can either be rented or owned. Therefore, a high homeownership rate implies a low renter rate.

According to the 2012 ACS, the metro area with the highest homeownership rate is Barnstable Town, MA at 81.6%. The national homeownership rate during the same time period is 64.7%. The Nassau-Suffolk, NY, metro area is the only metro area in the top ten with a population less than 100,000.

As one might expect, the homeownership rate is linked to affordability. In general, homeownership rates are higher when homes are more affordable. Eight of the top ten metropolitan areas have median home values below the national median home value of $171,900.

According to the 2012 ACS, the metropolitan area with the lowest homeownership rate is the New York metro division at 38.8%. The three areas with the lowest homeownership rates (New York, NY, Los Angeles, CA and San Francisco, CA) are heavily populated metropolitan areas with median home values well above the national figure.

In addition, three of the ten areas with the lowest homeownership rates are home to large universities which place a heavy demand on rental units. Group quarters such as dormitories are included in the ACS which also pushes homeownership rates lower in these areas.

The Manhattan, KS metro area is home to Kansas State University. The Lawrence, KS metro area is home to the University of Kansas. The College Station-Bryan, TX metro area is home to Texas A&M University.

*** The ACS typically produces lower homeownership rates than other government data sources like the Housing Vacancy Survey (HVS). NAHB believes this is due to the extensive follow-up interviews conducted with the ACS which classifies fewer units as vacant and more as occupied (probably differentially owner-occupied), although the Census Bureau has not yet confirmed this assertion. The HVS is timelier but the ACS has more geographic detail.

 

• The complete series is provided below.

1. Eye on Housing – Top Ten Metro Areas – Owner Occupied Housing Units
2. Eye on Housing – Top Ten Metro Areas – Homeownership Rate
3. Eye on Housing – Top Ten Metro Areas – Vacancy Rates
4. Eye on Housing – Top Ten Metro Areas – Single-Family Concentration
5. Eye on Housing – Top Ten Metro Areas – Median Income and Home Value
6. Eye on Housing – Top Ten Metro Areas – New Construction

Top Ten Metro Areas – Owner-Occupied Housing Units

In a recent study, NAHB examines eight key housing statistics from the 2012 American Community Survey (ACS). The study allows readers to compare the statistics for all metropolitan (metro) areas in the United States. A metro area is an aggregation of counties that share a local labor and housing market based on commuting patterns. This post lists the ten metro areas with the highest count of owner-occupied housing units; the first statistic discussed in the study.

As one might expect the count of owner-occupied housing units is directly related to population and the homeownership rate. Occupied units can either be rented or owned. Therefore, a high homeownership rate implies more owner-occupied units relative to rental units.

The metropolitan area with the most owner-occupied units is the Chicago-Joliet-Naperville, IL (Chicago) metro division with just over 1.8 million units. The Chicago metro division is the third most populous at just under 8 million. The Chicago metro division has a homeownership rate of 63.3% which is slightly below the national average of 64.7%.

The New York-White Plains-Wayne (New York) metro division ranks second with just under 1.7 million units. The New York metro division is the most populous metro area. The population of the New York metro division is nearly 12 million. The homeownership rate, however, for the New York metro division is well below the national average at 38.8%.

The Los Angeles-Long Beach-Glendale (Los Angeles) metro division ranks third with just under 1.5 million units. The Los Angeles metro division is also more populous than the Chicago metro division but with a lower homeownership rate. The homeownership rate for the Los Angeles metro division is 45.8%.

The remaining metro areas on the list have both large populations and homeownership rates that approach the national average of 64.7%. The Philadelphia metro division and Minneapolis-St. Paul-Bloomington metro area are the only two metro areas on the list with homeownership rates above the national average.

 

• The complete series is provided below.

1. Eye on Housing – Top Ten Metro Areas – Owner Occupied Housing Units
2. Eye on Housing – Top Ten Metro Areas – Homeownership Rate
3. Eye on Housing – Top Ten Metro Areas – Vacancy Rates
4. Eye on Housing – Top Ten Metro Areas – Single-Family Concentration
5. Eye on Housing – Top Ten Metro Areas – Median Income and Home Value
6. Eye on Housing – Top Ten Metro Areas – New Construction

Young Adults Living with Parents Up Sharply

New NAHB Economics research shows that the share of young adults ages 18 to 34 living with parents or parents-in-law increased sharply in the late 2000s. According to the most recent American Community Survey (ACS), one in three young adults ages 18 to 34, or more than 24 million, lived in homes of their parents or parents-in-law in 2012. By comparison, the 1990 and 2000 Censuses reported that only one in four young adults ages 18 to 34 lived with parents at that time.

The NAHB analysis shows that the biggest shift in the preferences of young adults to live with parents happened after 2005. This is particularly true for older young adults, ages 25 to 34, whose share living with parents was fluctuating around 12 percent from 1990 through 2005 and then quickly rose to exceed 19 percent in 2012 (see figure below). The younger cohort, ages 18 to 24, was more likely to live with parents in 1990, when more than half of these adults lived with parents, than in the early 2000s. However, by 2006 this share exceeded 50 percent again and grew to more than 57 percent in 2012.

Rising college enrollment among younger adults ages 18 to 24 helps explain their increased preferences for not leaving parental homes. The majority of adults in this age group, 52 percent, attended school or college in 2012, compared to 45 percent in 2000 and 43 percent in 1990. College attendance plays a less important role in the decision of older adults, ages 25 to 34, to stay at parents’ home. Less than 14 percent of adults in this older cohort were still in college or school in 2012, the comparable share in 1990 and 2000 was just slightly below, close to 12 percent.

For older, more experienced and better educated adults ages 25 to 34, the ability to find stable, higher-paying jobs plays an increasing role. As unemployment rates kept increasing in the late 2000s so did the shares of young adults living with parents. In 2000, the shares of unemployed in this age group were 7 percent among young adults living with parents and 4 percent among those living independently. By 2012, these shares reached 14 percent among adults living with parents and 6 percent among same age adults living independently.

The NAHB report also analyzes state unemployment rates and finds that, on average, states with larger increases in unemployment rates among young adults registered larger gains in percent of young adults living with parents. Even though unemployment rates started to decline in most states in 2011, shares of young adults living with parents remain stubbornly high and even increased in some states, suggesting that it takes longer for young adults to overcome the overall sense of economic instability, gain confidence and financial independence before leaving parents’ homes. This is particularly true for states hardest hit by the housing boom and bust, such as California and Florida, where percent of young adults living with parents continued to rise through 2012 despite improving job markets.

As of 2012, three Northeast states – New Jersey, Connecticut, and New York – register the nation’s highest shares of young adults ages 18 to 34 living with parents or parents-in-law – 45, 42 and 41 percent, respectively (see the map above). California and Florida – two of the states hardest hit by the housing boom and bust – follow with their shares just slightly under 40 percent. At the opposite end of the spectrum are the District of Columbia known for its relatively stable job market and North Dakota known for its oil booming economy – both registering shares under 20 percent.

Young adults ages 25 to 34 traditionally represent about half of all first-time home buyers. Their delayed willingness and ability to leave parental homes and strike out on their own undoubtedly contributed to suppressing housing demand further during the Great Recession. Declining shares of young adults living with parents in some states – Rhode Island, Montana, Wyoming, Maine, Delaware and New Mexico among others – could be one of the early signs that pent-up housing demand may finally start turning into realized housing demand.

The Geographic Distribution of Households with Nonrelatives

A component of pent-up housing demand is the situation of collapsed households — individuals who reside with another household. From a data perspective, we can identify some of these households by estimating the number of housing units that contain individuals who are not related to each other. This is just a part of pent-up demand of course, as it excludes adult children who live with parents or other relatives.

NAHB has previously estimated that pent-up housing demand totals about 2.1 million potential households. The Census Bureau calculated a similar number, reaching 1.9 million households who are “doubled up.” And a recent Federal Reserve Bank of Cleveland study puts the number at 2.6 million potential households.

Data from the 2010 American Community Survey allow us to map the geographic distribution of the households with nonrelatives. The shares of such households are highest in states along the coasts and lowest in the South.  

The state with the highest share is Nevada, at 16.4%, followed by Hawaii( 15.5%) and California (15.3%).

The state with the lowest share is Alabama at 8.8%, with both Mississippi (9.8%) and Arkansas (9.8%) at less than 10%.

While these data are likely influenced by recent events in the housing markets, they also reflect cultural differences among the states. Households with nonrelatives includes homes occupied by the decidedly unromantic classification of “cohabitating partners.” This may be a more common practice along the West Coast and the Northeast than in parts of the South.

Excluding such couples, yields “shared households,” but unfortunately the ACS data do not allow an easy mapping of that population group, which has been growing as a direct result of the Great Recession.

The Geography of the Age of the Housing Stock

In January, Eye on Housing took a look at the age of the housing stock. In that analysis, we found that according to the 2009 American Housing Survey (AHS), the median age of owner-occupied homes in the United States is 34 years old, 11 years older than the median age found in the 1985 AHS. So it is clear that the U.S. housing stock is aging. And older homes are typically more expensive to maintain.

Using data from the 2010 American Community Survey, the geographic distribution of the median age of the entire housing stock (owned and rented) can be presented.  And clear regional clustering can be seen.

For the typical housing unit, the oldest homes are found in the Northeast. With the exception of the District of Columbia (median age of 63, but not a good geographic comparison with states consisting of both urban and rural areas), the state with the highest median age is New York, at 57 years.  Rhode Island is next at 56.

The youngest housing is present in the southern parts of the nation, where population growth has been the highest in recent decades.

An almost identical map portrays the share of the housing stock built before 1970. Again, New York tops the lists of states, with almost 70% of its housing stock having been built before 1970. Rhode Island (65%) and Massachusetts (63%) round out the top three. Again, D.C. ranks higher than any state, with 78% of its housing stock having been built before 1970.

The contrast in shares is strong between states. Among states with younger housing stocks, Nevada (11%) and Arizona (17%) have the smallest shares of their housing stocks having been built before 1970.

This information is clearly important for housing demand, as areas with aging housing stocks have higher demand for both remodeling and replacement housing construction. But on the other hand, the geographic distribution of the age of the housing stock reflects the movement of population within the United States in recent decades.

The following map shows net migration (state-to-state, as well as international) from 2000 to 2010, with the states in red losing population. It’s clear that there is a significant correlation between net migration patterns and the age of the housing stock.  And areas with higher population growth have greater demand for home building.

Immigrants Can Have Substantial Impact on Housing Demand

A new research paper from NAHB Economics investigates how immigrants affect US housing demand.  The study analyzes recent data from the American Community Survey (ACS) that has detailed information on the country of origin, age, family status and housing choices of newly arrived immigrants. The data show that new immigrants are a young and diverse group of people. More than two thirds of them are under age 35. Close to 42 percent of newly arrived immigrants come from Asia and another 40 percent come from Americas. European immigrants account for additional 10 percent of newly arrived immigrants, and the remaining 8 percent are accounted for by other regions.

The study finds that compared to the native born population, immigrants are more likely to live with parents, other relatives or friends rather than establish their own households. These tendencies are reflected in immigrant headship rates that are lower across all age groups. However, the longer immigrants stay in the United States the more likely they are to establish their own households. In case of European-born and other immigrants, their headship rates eventually exceed those of the native born population.

Similarly, the study finds that compared to the native population, immigrants are more likely to rent than own and move into multifamily units.  However, as duration of their stay in the US increases, income rises and socio-economic status improves they are more likely to buy homes and move into single family houses. Europe- and Asia-born households register the highest homeownership rates among all immigrants, reflecting their elevated socio-economic status in the US.

To predict future housing needs of immigrants, the study further builds a model that takes into account age of newly arriving immigrants, region of their origin and length of stay in the United States. For purposes of illustration, the model is applied to the Census Bureau’s low-end 2010 projection of 1.2 million net immigrants. If net immigration of 1.2 million persists for 10 years, new immigrants are projected to account for close to 3.4 million US households (see Figure below). They are estimated to occupy more than 2 million multifamily units and more than 1.2 million single family homes. More than 900 thousand of these new immigrant households are projected to become home owners.

55+ Households are Nearly Everywhere

NAHB analysis of data from the Census Bureau’s American Community Survey shows that, despite popular belief, the geographic distribution of households headed by someone age 55 or older is fairly even across most of the country.  In every state, these 55+ households account for over 30 percent of all households.

On a national level, 43.9 million households are headed by someone 55 years old or higher, accounting for nearly 38 percent of all U.S. households.   Among the 50 states and the District of Columbia, the 55+ household share ranges from 31 to 45 percent. West Virginia tops all states, with 45 percent of its households headed by someone 55 or older, followed by Florida at 44 percent, Hawaii and Maine (each at 43 percent) and Pennsylvania and Montana (at 42 percent). At the other end of the scale, Utah and Alaska are the only states where less than one-third of the households are 55+.

The 55+ household share is also over than 30 percent for 97 percent of the 3,143 county and county equivalents in the U.S.  At the high end, 44 counties have a 55+ household share of over 60 percent. Mineral County, Colo., and Sumter County, Fla., are the highest ranked counties in the U.S. with 77 percent of their households headed by someone 55 or older. Sierra County, N.M., follows closely behind at 74 percent, while both Esmeralda County, Nev., and Wheeler County, Ore., come in at 71 percent each.

Some of the extreme cases of “young” and “old” counties don’t contain many households, but there are five counties in Florida that have both a 55+ household share above 60% and more than 38,000 total households: Charlotte, Citrus, Highlands, Sarasota, and Sumter.  For developers who may be looking for “exceptional” 55+ markets, these 5 counties in Florida form a distinct category.

For tables showing the 55+ household share, as well as the number of 55+ owners, renters, and totals in each state and county, see the complete study.

Construction Self Employment Rates are on the Rise

Construction is known for employing a relatively high share of self employed workers. In fact, according to the 2010 American Community Survey (ACS), the construction sector registers the second highest share of self-employed among all industries, more than 26 percent of the employed labor force, i.e. more than one in four construction workers are self employed.  Only agriculture has a higher share of self-employed, close to 34 percent, while a national average for all industries stands at 10 percent.

It has always been common for some builders and remodelers to maintain relatively small payrolls and rely on subcontractors for a large share of the construction work.  Interestingly, self-employment rates in the construction industry started to rise during the housing downturn and increased from 24 percent in 2006 to 26 percent in 2010. At the same time a national self-employment rate fell from 11 to 10 percent, and self employment in agriculture declined from 41 to 34 percent. Moreover, states known to have been hit hardest by the housing downturn – Florida, California, Nevada, and Arizona – registered some of the highest jumps in the construction self-employment rates. According to the ACS, the share of self-employed construction workers rose in Arizona from 16 to 21 percent and in Florida from less than 24 to 29 percent. Similarly, the share of self-employed construction workers increased by more than 4 percent in Nevada and almost 4 percent in California. It is likely that during the downturn builders and remodelers who were no longer able to maintain a steady work flow may have tried to manage costs by eliminating payroll positions and joining the ranks of the self-employed.  It is also possible that some construction employees laid off during the downturn were able to stay in the industry by striking out on their own.

The 2010 ACS data also show that five New England states have the highest shares of self employed construction workers.  Maine, Vermont, New Hampshire register shares in excess of 40 percent – 43.1 percent, 41.1 percent, 40.3 percent, respectively – well above a national average. Connecticut and Rhode Island follow with 38.5 and 36.9 percent. Montana registers the sixth highest construction self employment rate in the nation, 34.9 percent, i.e. more than one in three construction workers in Montana are self-employed.  Interestingly, Maine, Vermont, New Hampshire and Montana also stand out for having relatively high shares of residential construction workers in their state employed labor force.

Residential construction employment and construction self-employment rates for all states can be found in NAHB: Residential Construction Employment across States and Congressional Districts (Table 1).