Builder

72 B U I L D E R BUILDERONLINE.COM

DECEMBER 2016

There is significant geographic

variation with respect to the age

of homes, with clear regional clus-

tering. New York has the oldest

homes among states, with a medi-

an age of 55 years. Massachusetts

has a median age of 52. And the

District of Columbia, as a concen-

trated urban area, has a median

age of 74. Younger homes were

located in the West and the South,

in areas with more robust popula-

tion growth. The median age of

owner- occupied homes in Nevada

was just 18 , with Arizona at 23.

The aging housing stock means

additional demand for home build-

ing in the years ahead. Older

homes must be replaced. NAHB

estimates that tear-down construc-

tion housing starts totaled 55 , 000

in 2015 , making up just over 7% of

all single-family construction. Old-

er housing also means more

remodeling activity as demand

rises for improvements like aging

in place and energy efficiency. An

aging housing stock also offers op-

portunities for multifamily build-

ers to add density and new housing

with amenities in aging markets.

The challenge for businesses

and policymakers is that lower

income households tend to own

the homes most in need of im-

provement. In 2013 , the average

income of those who owned homes

built after 2010 was more than

$ 110 , 000 , compared with the

slightly higher than $ 81 , 000 aver-

age household income for owners

of homes built before 1969.

Connecting the underlying

need for residential improvement

and construction with spending

power and financing is yet another

illustration of the importance of

ensuring a healthy housing fi-

nance system. Whether redevelop-

ment means accessing residential

acquisition, development and con-

struction financing for builders,

home equity loans for homeown-

ers with tax-deductible interest, or

tax-exempt bond and tax credits

for multifamily rehabilitation,

addressing an aging housing stock

in the years ahead will be a signif-

icant source of economic growth.

O

ne consequence of the reduced level

of single-family construction since

the Great Recession has been an

aging of the country’s housing stock.

According to NAHB analysis of the most recent

edition of the American Housing Survey (2013),

the typical owner-occupied home is 37 years

old. This represents a signifi cant increase since

1993 , when the typical home was 27 years old.

Looking at the underlying distribution,

four out of 10 homes in the U.S. were built be-

fore 1970. The aging impact is clear: The share

of homes that are 35 years or older is 57%,

compared with 41% in 1993 and 46% in 2003.

Currently, homes six years or younger make up

just 2% of the owner-occupied housing stock,

compared with 6% in both 1993 and 2003.

BY ROBERT DIETZ

ECONOMY /

WHAT’S OLD IS NEW AGAIN

An aging housing stock signals growth for home building

Robert Dietz

NAHB Chief

Economist

MEDIAN AGE OF OWNER-OCCUPIED HOUSING STOCK BY STATE

Source: American Community Survey, 2013

18 to 29 years

30 to 39 years

40 to 49 years

50 to 59 years

60 to 74 years

Age Matters

Homes six years or younger

make up just 2 % of the

current owner-occupied

housing stock

NAHB NOTES