1. Delayed Household Formation Creates Pent-Up Housing Demand
A record one in four young adults now live with parents, grandparents, or roommates—well above historical norms. This delayed household formation slows new household creation but builds significant pent-up housing demand that will likely materialize as these individuals reach their mid-thirties.
2. Baby Boomers Drive Major Housing Shift
With the oldest baby boomers turning 80 in 2026, millions will transition housing over the next decade. Around age 75, large numbers shift from homeownership into rentals, multigenerational homes, and group settings—homeownership drops from 75 percent at age 75 to just 53 percent at age 90, creating substantial demand for alternative housing types.
3. Demographic Shift Creates Tight Labor Market
With 3.6 million U.S.-born residents turning 20 versus 3.3 million turning 65—a net difference of just 300,000—today’s tight labor market stems from family decisions made decades ago. Returning to early 2000s labor growth rates will require significantly increased immigration to offset workforce aging.
4. Working-Age Population Growth Plummets
Working-age population growth averaged 2 million annually from 1971–2010, then decelerated as baby boomers retired. A 2021–2023 immigration surge temporarily boosted growth, but sharp immigration curtailment in 2024–2025 plus continued retirements drive working-age population growth to near-1970 lows, risking future labor shortages.
5. Demographics Limit Future Economic Growth
Even with immigration levels matching the 2010–2019 decade, working-age population growth would hit a historically low 550,000 annually due to aging demographics and flat birth rates from 20 years ago. The United States needs net immigration of at least 280,000 per year through 2028 to prevent declines in the working-age population. This demographic constraint means labor markets stay tight and could limit how fast the economy can grow.
6. Construction Labor Depends Heavily on Immigrants
Nationally, 30 percent of construction workers are foreign born, with significant state variation. Construction workforce reliance on immigrants is highest in the South, West, and major Northeast cities, while the Midwest relies more on domestic workers. Areas with heavy immigrant workforce dependence face the greatest risk of labor shortages if immigration declines.
7. Young Family Growth Shifts to Southeast
The population of children under five is declining in most states due to lower birth rates, but growing in select Southeast markets, including the Carolinas, Tennessee, Georgia, Florida, and Texas, plus some Northeast areas outside New York City. This geographic concentration reflects fewer young families nationally but regional clustering driven by both migration of families and adults who subsequently become parents.
8. Select Sun Belt Metro Areas Maintain Strong Migration
While most Sun Belt metro areas that boomed during 2021–2022—including markets in Florida and Texas, along with Atlanta and Phoenix, among others—have seen migration slow dramatically or turn negative, four metro areas continue attracting strong domestic inflows: Raleigh-Durham, Charlotte, Nashville, and San Antonio maintain migration levels comparable to the 2021 surge.
9. Migration Returns to Affordable Markets
Several metro areas that experienced negative domestic migration in 2021–2022—Minneapolis, Sacramento, Portland, Riverside-San Bernardino, and Las Vegas—have turned positive as households follow lower home prices. These markets offer relative affordability compared to nearby expensive areas including the Bay Area, Seattle, and coastal southern California.
10. Immigration Concentrates in Few States
Over two-thirds of all net immigration from 2021–2024 flowed to just 10 states, with extreme geographic concentration. The top five states—Florida, California, Texas, New York, and New Jersey—captured 50 percent of total immigration, demonstrating highly concentrated regional impact.
—John Burns Research and Consulting LLC
