The Changing Profile of Renter vs. Owner Household Formation
For many in pursuit of homeownership and those already there, the Great Recession forced the American tradition of owning a home aside and renting became the viable alternative. Now safely out of the recession, many renters are choosing to stay put or better yet, keep the freedom to move. This is the second factoid in a series of five factoids, using data from the U.S. Census Bureau’s 2017 American Community Survey, to explore the changing profiles of owners and renters.
With a large portion of the population aging to 65 and over, American household demographics have shifted in the seven years, 2010 to 2017, since the last recession. The 65-plus age range now comprises over 25 percent of households in the United States. Ages 25 to 64, that made up 75 percent of households in 2010, have dropped to 70.8 percent in 2017.
Total household formations increased only 4.8 percent since 2010 as Millennials have been slow to enter the housing market, either as renters or owners. At the same time, as Baby Boomers have poured into the older age groups, the 65 and over group jumped 23.4 percent. Household formations for ages 25 to 44 slowed to a negative growth down 1.0 percent from 2010 to 2017, while ages 45 to 64 increased slightly by 1.4 percent.
For the furniture and home furnishings industry, as the Baby Boomers continue to age, their purchasing power will lessen significantly over the next 10 years. Not surprisingly, ages 45 to 64 had the highest median household income at $72,443 in 2017, while ages 25 to 44 is 9 percent less at $65,879. The aging Boomers over 65 had median household incomes of $43,735.