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Market Update Gen Y Fun Facts: Twenty-four to 33 percent of Millenials have moved back home with their parents at some point in their adulthood. n Microunits and microhousing, 200 to 300 square feet, are growing in popularity among Echo Boomers. n A third of Gen Y want to live in the city, and a third want to live in the suburbs. The rest are split among preferences for small towns and country living. n Currently, 35 percent of Gen Y own their homes and 37 percent rent. n ("BINGO! U.S. Housing Market Finally Getting Its Numbers" continued from page 29) not have sufficient savings for a down payment, and, as noted, might not qualify for a mortgage. These factors keep them renting, even as they strike out on their own to form households separate from their parents. In spite of these trends, Crowe believes that homeownership will eventually come for Gen Y, but it might be later in life than it did for previous generations. "There is some evidence that owning will just come later when these barriers are eliminated and there is a more stable lifestyle," he said. "Our polls show continued desire for homeownership even among younger individuals, but they just don't have the ability to buy at this time." Multifamily Housing Need Increases Between 1970 and 2011, housing stock held fairly steady with the percentage of single-family housing ranging from 70 to 74 percent, duplexes and four-plexes from 8 to 14 percent, and multifamily housing from 15 to 19 percent. In 2012, however, those numbers changed dramatically. While single-family housing stock only dipped to 68 percent, duplexes and four-plexes bottomed out at 1 percent and multifamily housing jumped to 30 percent. Stock of Homes by Building Size Share of 2-4 unit buildings falling in stock, but flow significantly different 100% 90% 80% 15% 18% 19% 18% 18% 14% 12% 10% 10% 8% 70% 30% 1% 60% 50% 40% 30% 72% 70% 1970 1980 72% 74% 2000 71% 2011 68% 20% 10% 0% 1990 SF 2 to 4 2012YTD Flow 5+ What does this mean? More multifamily units were produced than single-family homes in 2012, a trend we can anticipate will continue over the next several years. It also indicates that, due to foreclosures and other economic factors, some single-family homes were purchased as investment properties and then converted into multifamily housing. While this opportunity created new uses for existing housing stock, it also reduced the demand for new stock. For the last four quarters, NAHB's multifamily production index has been positive. In 2012, there were approximately 247,000 multifamily home starts. NAHB predicts this figure will increase to 312,000 in 2013 and 331,000 in 2014, with the majority of multifamily starts consisting of five or more units. These higher numbers are consistent with the multifamily home construction of the early 2000s, a period of time considered normal for the housing market. "The multifamily market is nearly healed," Crowe said. "It's a positive, forward-looking, very viable market right now." Single-Family Starts Leave Room for Improvement The outlook for single-family homes is not as positive. In fact, Crowe describes the market for the construction of single-family homes as still struggling, but this also provides the greatest opportunity for improvement as the economy continues to rebound. In 2012, for example, there were 534,000 single-family starts, about 41 percent of the 1.3 million new home starts that occurred between 2000 and 2003. In 2013, Crowe forecasts 658,000 single-family starts, followed by 848,000 in 2014. Compared to 353,000 in March 2009, these figures represent significant improvements. Of course, some markets are nearer to previous construction levels than others. Comparing 2000 to 2003 against 2012 housing permits, the top four markets were all in Texas, namely: Odessa, Midland, San Angelo and Austin. Crowe also anticipates an increase in demand for singlefamily homes as Millenials grow older. They will settle into more stable jobs and lifestyles, and gravitate toward home ownership. Existing homeowners from different age groups will "trade up," creating resale opportunities for their existing homes and driving the need for new construction. "As the economy gets better, we will see the return of home ownership demand," Crowe said. In terms of overall economic health, the U.S. is recovering slowly. As the housing industry adapts to demographic shifts and changing economic conditions, it continues to outpace the economy, creating a positive new construction outlook for 2013 and 2014. Good news all around. n Dana Neuts is a freelance writer based near Seattle, Wash. She is the editor and publisher of iLoveKent.net, and also serves as the national secretary/treasurer for the Society of Professional Journalists. Dana can be reached at dana@ virtuallyyourz.com. (See Dana's Gen Y sidebar on page 56) 30 | www.cedmag.com | Construction Equipment Distribution | June 2013 26_Housing_Feature_Index_KP.indd 30 5/31/13 2:42 PM