Prime Working Age Growing = Need for More Homes
Good news! The prime working age group has started to grow again.
"What is the prime working age group?" you ask. Simply put, it covers those starting early careers (age 25) to those that are nearing retirement (age 54). That wide range covers multiple generations at varying stages of life. This group peaked nearly a decade ago in 2007 and bottomed out at the end of 2012. But today, we have nearly climbed back to the 2007 peak and indicators show that we have nowhere to go but up!
What does this have to do with housing? As we have seen in many markets nationwide, including the Minneapolis-St. Paul area, there is a need and a want for more housing. A lot of this has to do with the creation of more and more households. Despite the "millennial delay" that we so often hear about, young people are starting careers and family formations will soar in the coming years. It does not matter if they ultimately choose to stay in the inner cities or move to the suburbs, they will need some form of affordable housing.
Additional note: The lack of labor is something the building industry has been facing for years. A growing prime working age group will hopefully help address this issue.
While the most educated generation in history is starting off with moderate wages and student loans to pay back, many young couples have two breadwinners allowing flexibility in finding that first home (to an extent). But the majority of buyers still expect to buy in the $150,000 to $249,999 range. Unfortunately, the cost of land is making that range difficult for many homebuilders to create enough product at the current time.
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