This week, I want to share some fascinating insights ResiClub Analytics recently highlighted about long-term trends that are reshaping the housing market. While I try to keep most of my updates specific to Utah’s housing market, today will focus more on national trends, with some context on how this could affect Utah’s housing market.

Table of Contents

• Household Sizes are Shrinking

• Population Growth Slowing Down

• Renovation Boom on the Horizon

• The Baby Boomer Effect

• Insurance Challenges Growing

• Build-to-Rent Expanding

• Big Builders Getting Bigger

• What This Means For You

Household Sizes are Shrinking

The American household is shrinking. One and two-person households are on the rise due to delayed life milestones, falling birth rates, and our aging population.

This trend is already influencing what builders are constructing - the median square footage of new single-family homes has been declining since 2014, currently sitting at 2,036 square feet. This trend is likely in response to household sizes shrinking as well as the demand for affordable housing.

The average household size in Utah is 3.04 people per household, making it the state with the largest household size. Utah also has the youngest population with the median age of 32 years old.

Population Growth Slowing Down

The Census Bureau continues to revise population forecasts downward. Their latest projection shows about 80 million fewer Americans by 2050 than previously expected. By 2038, deaths are expected to exceed births in the U.S.

The biggest reason for population growth slowing is fertility rates declining everywhere across the world, even in Utah. Because of the compounding negative consequences of a shrinking population, many governments in Asia are actively trying to address this by providing benefits and incentives for families to have more children, and I’m sure we will continue to see more of this.

Renovation Boom on the Horizon

Several factors are creating a perfect storm for home renovations:

• Our housing stock is aging

• Many homeowners are "locked in" to ultra-low mortgage rates

• Record home equity levels are making HELOCs more attractive

The Baby Boomer Effect

There will be 9.2 million fewer baby boomer homeowner households by 2035, according to Freddie Mac. This gradual "silver tide" will release more homes onto the market each year, potentially helping with some of the supply constraints we've been experiencing.

Insurance Challenges Growing

Home insurance premiums rose 33% between 2020 and 2023, with non-renewal rates increasing in 43 states. Climate-related risks are being factored into insurance models, creating challenges in some regions.

Build-to-Rent Expanding

A record 9.5% of single-family housing starts in 2023 were build-to-rent properties, up from just 1.6% in 2005. This trend is creating new rental options that look and feel like traditional single-family neighborhoods.

Big Builders Getting Bigger

Publicly traded homebuilders continue to increase their market share, using their access to capital, economies of scale, and ability to weather economic uncertainties.

What This Means For You

Whether you're planning to buy, sell, or stay put, these trends will shape our local market in the coming years. The good news? Being informed puts you ahead of the curve! Remember, these are macro trends. Utah has it’s own trends, which we’ve covered extensively in previous editions, which you can read by clicking here.

I'd love to chat about your real estate goals and how we can navigate these changes together. Call me to schedule a personalized consultation, or reply to this email with any questions you might have.

Here to serve,