The most significant factors impacting housing over the coming years are whether aging baby boomers decide to grow old where they are and where young immigrants decide to settle, according to a new study released today by the Mortgage Bankers Association.

The study, “America’s Regional Demographics in the ’00s Decade: The Role of Seniors, Boomers and New Minorities,” conducted by William H. Frey of the Brookings Institution and sponsored by the MBA’s Research Institute for Housing America (RIHA), analyzes two components driving the changes that will transform the U.S. population over the next several decades — aging boomers, and immigration of Hispanics and Asians.

It finds that the overall U.S. population will experience a rapid aging as boomers grow older, while absorbing large numbers of young recent immigrants. Different regions of the country will have different demands for housing driven by the relative impacts of aging in place versus migration within the country and immigration from abroad. For example, suburban areas will gray faster than urban areas due to the boomers aging in place.

“It has been said that demographics are the future that has already happened and demographic changes are one of the most powerful forces impacting the residential and commercial real estate and real estate finance markets,” said Doug Duncan, MBA’s chief economist and senior vice president of research and business development. “We expect that this study will help our members develop business plans to meet the ever changing American marketplace.”

Key findings from the study include:

Regional Differences in Aging Patterns

  • Senior populations can increase through in-migration or through aging in place. However, aging in place is the dominant force that will shape demographic changes in the years ahead.

  • Even in Arizona, which shows the highest rates of net in-migration, the migration effect is dwarfed by the effect of the existing population simply getting older and not moving.

  • The most dramatic impact of aging in place will be in parts of the country that are not now associated with aging populations, like Nevada, Colorado and Georgia. These states that will exhibit the fastest senior growth are not necessarily the ones that have the highest percentage of seniors. States with high senior shares have typically experienced one or more decades of sustained declines in their younger populations. This leaves behind seniors who are far less likely to move than people in their 20s and 30s.

  • Suburbs will be the fastest graying part of our national landscape. In projections of Philadelphia and Chicago, for example, suburbs will begin to age faster than cities, even though both cities start out having older populations than their suburbs.

  • While close to 30 percent of young households move each year to a new residence, that percentage slides down to the 4-5 percent range for people in older age groups. Therefore, household mobility, which has been a major driver of home sales, will fall off as boomers age.

  • Less than 2 percent of residents aged 55–64 move across state lines in any one year, and the percentage is even less for those over 65. The aggregate number of interstate moves among those aged 55 and over is dwarfed by the number of moves undertaken by the younger population, meaning fewer moves as a larger portion of the population is over 55.

  • Well-off young senior populations will emerge in areas like Las Vegas, Denver, Dallas and Atlanta.

Greater Dispersion of Minorities

  • While it is popular to think of the United States as a melting pot, Hispanic, Asian and other minority groups are disproportionately clustered in selected areas.

  • What has changed is the “hold” that the traditional immigrant gateways have on the Hispanic population. In 1990, the top 10 metropolitan areas were home to fully 55 percent of all U.S. Hispanics, and the top two, Los Angeles and New York, housed nearly three in 10 Hispanics nationwide. In 2005, however, less than half of all Hispanics live in the top 10 areas, and Los Angeles and New York are home to only 22 percent. When one examines the far reaches of Hispanic dispersion nearly one third of all counties in the United States have at least 5 percent of their populations that are Hispanic, compared with one out of 6 in 1990.

  • The vast majority of Hispanics and Asians speak English at home, and those who do not can communicate in English very well.

  • These new minorities are also relatively young compared with the rest of the population, suggesting that racial generation gaps are emerging in areas where they live in large numbers. That is, young adults up to age 40 in these areas show a strong representation of new Hispanic and Asian households, whereas the “over 40” crowd is still dominated heavily by white and black baby boomers.

  • Minorities tend to be younger and as such are highly mobile. Four out of 10 young Hispanics or blacks changed residence over the 2004-05 period. Nearly one out of 10 Hispanics, and more than one out of seven Asian movers, came directly from abroad.

  • Overall, 15 of the nation’s 88 large metropolitan areas have majority minority populations.

New Regions Defined by Demographic Changes

  • “New Minority States” where Asians and Hispanics currently account for about one-third of the population: New York, New Jersey, Florida, Illinois, Texas, New Mexico, Arizona, Nevada and California.

  • “Faster Growing States” contain many suburban communities and attract migration from the rest of the country as well as from recent immigrants. This group of states will have the highest rate of growth for the 55-and-over population: New Hampshire, Maryland, Virginia, North Carolina, South Carolina, Georgia, Tennessee, Colorado, Utah, Idaho, Oregon and Washington.

  • “White-Black Slower Growing States” and “Mostly White Slower Growing States” will have the lowest rate of overall population growth, but will gray rapidly through aging in place, and will have the highest shares of seniors: Ohio, Michigan, Alabama, Mississippi, Louisiana, Arkansas, Missouri, Washington, D.C., Maine, Vermont, Massachusetts, Connecticut, Rhode Island, Pennsylvania, West Virginia, Kentucky, Indiana, Minnesota, Wisconsin, Iowa, North Dakota, South Dakota, Nebraska, Oklahoma, Kansas, Wyoming and Montana.

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