Calculated Risk vs Mish: Demographics Good for Housing?

Are demographic trends good for housing? Here are two views.

In Largest 5-year cohorts, and Ten most Common Ages in 2017 Calculated Risk noted "The younger baby boom generation dominated in 2010. By 2017 the millennials have taken over. And by 2020, the boomers are off the list."

He concluded "My view is this is positive for both housing and the economy, especially in the 2020s."

Color Coding

To judge that assessment, I took Calculated Risk's table and color coded it.

  • Red: Not Buying
  • Yellow: Likely Cannot Afford to Buy
  • Green: Potential First Time Buyers

2030 is too far away to make an assessment. Too many things can happen. Instead, let's discuss the next five years or so, using the middle column as our guide.


  • There is a favorable shift from cohorts 4-5 to chorts 2-3.
  • The first "not buying" cohort jumps from cohort 7 to cohort 4.
  • There were three "not buying" groups in 2017 but there are four in 2020.
  • There was a favorable shift from "cannot afford" from 2017 to 2020.

On the surface, the demographic trends may appear neutral or slightly favorable. However, I was pretty lenient with the green, potential first-time buyers.

Given housing price trends, most 25-29 cannot afford a house now and unless there is a price crash, those conditions will not change in the next five years.

Also, attitudes towards family formation and mobility have changed.

Finally, as boomers die off, millennials will inherit their parents homes. This will put a supply of homes up for sale, at a clear impact to prices.

For now, and the next five years, attitudes and affordability are the key issues. They far outweigh any potential demographic benefit, if any.

Home Buyer's Dilemma

The only way that changes in the next five years is is housing crashes. And if that happens, what happens to jobs and wages?

Mike "Mish" Shedlock


I agree with the premise that despite very high housing prices on the coasts, most of "flyover" country is quite affordable. I was in Nairobi, Kenya last month and was shocked how expensive safe & Western neighborhoods were there...something like $500-600k USD for starter homes. It makes most of the USA look very sane. Even with relatively low wages, millennials will get their parents' housing and stocks and since they've run up so much, many of them will be multi-millionaires without having worked for it or by having very low wages.


Not sure I'd be so negative about housing. Immigration, especially of the rich/ upper middle class people, will also help keep prices up. For all of Trump's bluster re: immigration, it is tough to see the USA not having some system in place for highly skilled migrants/ rich people to come in.
If the US millennials cannot buy houses, surely we can find some rich foreigners to sell them to... Of course those foreigners became rich because we outsourced our work to them enabling them to become rich. Very definition of a globalized world!


@Markab Don't mix political bias with economic data, can be hazardous to your investing health. I don't like that CR supports more LIB policies, as I am not a LIB. But I have to say of every blog I know of, CR has been the most right of all of them. Most of the blogs who called the crash back in 2006, made the mistake of becoming permabears post 2009, and missed this entire 9 year UP cycle. CR called the bottom of the apartment market in 2010 (a fortune has been made in apartments since). And unlike many bearish blogs who have called for a recessions nearly every year since 2009, CR has not called for a recession ONCE. I think his blog is actually very data driven and less bias driven. I try to not let my political biases get in the way of investing and financial forecasting. But it is tough!


Very true. Pretty much every city in the Southeast for example (except Miami) is still quite affordable.

Moreover, if you use constant dollars to plot out the housing price rises since the housing crisis you’d see that while prices have most definitely risen a lot, they are not even close to what they were in 2006 in real terms.