New Study Reveals Projections of a Slowdown in Household Growth, Housing Demand

Economics
Published

According to a recent study from the Joint Center for Housing Studies (JCHS) of Harvard University, household growth in the coming years is projected to slow significantly, which would have a notable impact on housing demand.

JCHS projections show household growth in the U.S. would slow to 8.6 million (approximately 860,000 per year) between 2025 and 2035, down from 11.2 million in the 2000s and 10.1 million in the 2010s.

If the trend continued, the projections show household growth between 2035-2045 would decline to just 5.1 million, which would be the lowest of any decade in the last 100 years. These projections are based on immigration levels remaining similar to those of the past three decades.

A major implication of the slowing growth would be declining demand for housing construction. Household growth is the largest source of demand for new homes. The projected slowdown would reduce demand for new construction from the current rate of 1.4 million homes to an average of 1.1 million per year between 2025-2035 and 800,000 per year between 2035-2045.

JCHS Projections of Household Growth

Household formations are projected to decline every year between 2025 and 2045
Source: JCHS tabulations of U.S. Census Bureau Decennial Censuses and JCHS 2024 Household Projections.

However, a key component of housing demand is the formation of households among young adults (aged 25-34). In early 2024, NAHB examined Census data that showed in the post-Covid period, the share of young people living with parents had been declining. As of 2022, that share had fallen to a decade low — a promising trend signaling sustained housing demand in the years to come.

Further NAHB analysis recently examined which areas of the country have the highest and lowest shares of young adults living with their parents. Although the overall shares show a decline, this demographic continues to face myriad housing affordability challenges, particularly elevated home prices and increased costs of living.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Advocacy

May 22, 2025

House Approves Tax Bill with Key Housing and Business Provisions

By a vote of 215-214, the House early in the morning on May 22 narrowly passed the One Big Beautiful Bill Act, sweeping tax and domestic policy legislation that NAHB believes is very positive for small businesses, real estate and our members.

Economics | Indices

May 22, 2025

Income Growth Helps Mute Existing Affordability Constraints

Despite solid income gains and lower home prices, Americans still continue to face major housing affordability challenges, according to the latest data from the NAHB/Wells Fargo Cost of Housing Index (CHI). The CHI results from the first quarter of 2025 show that a family earning the nation’s median income of $104,200 needed 36% of its income to cover the mortgage payment on a median-priced new home. Low-income families, defined as those earning only 50% of median income, would have to spend 72% of their earnings to pay for the same new home.

View all

Latest Economic News

Economics

May 22, 2025

Existing Home Sales Fall in April

Despite the brief retreat in mortgage rates and increased supply, existing home sales dropped to 7-month low in April, according to the National Association of Realtors (NAR). This unexpected decline suggests buyers’ activity continues to be constrained by economic uncertainty and ongoing affordability challenges even with improved market conditions.

Economics

May 22, 2025

Income Growth Helps Mute Existing Affordability Constraints

Despite solid income gains and lower home prices, Americans still continue to face major housing affordability challenges, according to the latest data from the National Association of Home Builders (NAHB)/Wells Fargo Cost of Housing Index (CHI).

Economics

May 21, 2025

Gains for Multifamily Missing Middle over Last Year

The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties.