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It’s all about the ‘boom’

by Carla Griffin on April 3, 2012

Over the next two decades, baby boomers and their children, the echo boomers, will be the major players in the housing market.

It’s boomers and their babies that are going to have the major impact on U.S. housing over the next 20 years, according to new report from the Bipartisan Policy Center titled “Demographic Challenges and Opportunities for U.S. Housing Markets.”

Over the next two decades, the aging baby boomer demographic will boost the nation’s senior popular by 30 million, according to Census Bureau projections.   The demographic shift likely book the supply of housing, since people over age 65 typically release more housing than they absorb.

This creates a huge opportunity for the echo boom generation – the nearly 65 million born between 1981 and 1995. This group has been hit hard by recession at the same they’ve entered independent adulthood.  Reduced employment and income has limited their ability to form households and attain homeownership.

The increased supply could mean additional buying opportunities for the echo boomers, according to Lawrence Yun, chief economist for the National Association of Realtors (NAR).  Yun notes echo boomers could absorb 75 to 80 percent of the available inventory of owner-occupied housing by 2020.

The current market continues to favor homeowners, as rental-housing vacancy rates have declined over the past two years, and rents have been increasing, according to the report.

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