The growth in suburban housing markets across the U.S. is expected to continue as consumer demand strengthens and demographics change, according to a new publication from the Urban Land Institute’s Terwilliger Center for Housing.
The study, Housing in the Evolving American Suburb, found that the suburbs around the 50 largest U.S. metros account for 79% of the population there but 91% of the population growth between 2000 and 2015. They also accounted for 75% of the young adults aged 25 to 35.
- Millennials, seeking more affordable housing and proximity to employment, are moving to economically challenged and greenfield areas of the suburbs, which typically offer the lowest housing costs outside of the city.
Although much of the recent focus in the housing industry has been on the rising tide of affluent young professionals moving to urban centers and helping to generate a wave of residential projects to meet their needs, the ULI report suggests that the suburbs are still surpassing these downtown areas in population growth and, in some cases, diversity.
From 2005 to 2015, the suburbs accounted for 91% of the population growth as well as 84% of the household growth in the top 50 metros. Meanwhile, 76% of the minority population there called the suburbs home.
Additionally, as of 2014, more than two-thirds of jobs in the 50-largest metros were in suburban cities and towns, the ULI report found. The number of suburban jobs remained stagnant between 2005 and 2010, when the urban job count rose by 8.2%, but increased 9% from 2010 to 2014 compared to a 6% gain in urban jobs for the period.
It comes as younger buyers continue to face headwinds like student debt, high rents and rising home purchase prices, keeping them out of the homebuying market. Lower housing costs are one factor drawing this group to the suburbs. A study earlier this year by the National Association of Realtors found that the percentage of millennials buying a home in an urban area fell to 17% from 21% a year ago.
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