A new, independent report released by the National Apartment Association projects demand for $1.1 trillion in new apartment buildings by 2030, and estimates that homeownership in the U.S. could decline 8 percentage points or more, bringing U.S. homeownership rates more in alignment with European countries. This report attributes the decline in homeownership and rise in apartment living to a growing immigrant population, Y Generation households and a shift to more urban lifestyles that necessitate higher density residential options.

Homeownership levels in the U.S. reached a crescendo in the 1970s, declined throughout the 1980s, and began rising again in the late 1990s. Today, nearly 68 percent of Americans own their homes, according to the author of the report Christopher E. Lee, President of CEL & Associates, Inc. and Special Advisor to NAA.

"A number of factors are aligning to create a significant shift in U.S. housing trends, bringing us nearer to a European model, where homeownership tends to be below 60 percent," Lee said.

The report projects the apartment renting population in the U.S. will grow by more than 10 million in the next 10 years, affecting public infrastructure, tax revenues, and the job market.

Highlights:

Generation Y Creates Demand

Nearly 85 million U.S. citizens are considered part of Generation Y. This generation prefers urban living over suburban, and often does not have enough savings or income to buy a home.

Currently, 57 percent of those under age 34 rent, and of those under age 45, 46 percent rent. By 2010 nearly 107 million people will be in the 18-44 age range (prime renters). If the percentage of 18-44 year-olds who rent increases due to inability or lack of desire to own a single-family home, potential renters could jump from 49.2 million in 2010 to as many as 63.7 million by 2030 – an increase of nearly 30 percent.

Job Growth in Urban Areas

More than 80 percent of U.S. jobs are located in urban areas, most in the Top 50 DMAs. For prospective home buyers with the traditional 30-percent income-to-loan qualifying criterion, the majority of young adults seeking work cannot afford a home and are likely to rent.

This demand for affordable housing will generate a wave of mixed-use and transit-proximate rental housing options in walk-able communities.

Hispanic and Aging Population Grow Rapidly

Currently more than half (54 percent) of the U.S. Hispanic population rents and the Hispanic population is forecast to grow significantly in the coming decades.

Likewise, the U.S.’s aging population is growing, and the likelihood of renting increases as householders age. Increasing life expectancy and medical wellness advances creates new demands for senior housing options for longer-living Americans.