U.S. housing analysts are drawing links between the rising age of first-time mothers and the country’s vibrant multifamily apartment market in recent years. On the flipside, they suggest recently released data from the U.S. National Vital Statistics System (NVSS) forewarns a looming multifamily exodus as the millennial age cohort continues to slide into its third decade.
NVSS recorded an unprecedented outcome in 2016 when the birth rate for mothers aged 30 to 34 (102.7 per 1,000) surpassed the rate for those aged 25 to 29 (102.1 per 1,000) for the first time since such recordkeeping began in 1940. The average age for bearing a first child was pegged at 26.6 years — up from 23.8 in 1986 and 21.4 in 1970 — while 32 per cent of all first-time mothers, or about 484,000 women, were 30 or older.
“Women are beginning to catch up from not having kids in their 20s,” concludes a new briefing from CBRE Multifamily Research. “While the overall rising age of first birth has a positive effect on keeping young households in multifamily rentals longer, the increased birth rate of women in their early 30s is likely providing incentive to move into homeownership.”
Birth rates for women aged 20 to 24 fell 4 per cent from 2015 levels and there was 2 per cent drop among women aged 25 to 29. However, year-over-year birth rates climbed for women in their 30s — up 1 per cent for mothers aged 30 to 34 and 2 per cent for mothers aged 35 to 39. This occurs in the context of a consistently declining national birth rate, which stood at 13 per 1,000 women aged 15 to 44 in 2010 but fell to 12.2 in 2016.
CBRE multifamily researchers point to growing homeownership among American households in their 30s, exhibited in statistics for the fourth quarter of 2017. They see this as a continuing trend, even as the new U.S. Tax Cuts and Jobs Act erodes some deductions that previously favoured homeowners.
“There’s no tax difference between renters and homeowners for the majority of households,” a CBRE backgrounder on the new law explained earlier this year. “The question is: how important are homeownership tax benefits in the home purchase decision-making process? The principal reason for first-time homebuyer to buy a home, according to the National Association of Realtors’ 2017 Profile of Home Buyers and Sellers, is desire to own a home of their own.”
However, analysts note that the multifamily sector ended the year strongly despite the steady influx of new supply, tallying about 1.37 million new units nationally since 2011. JLL reported a national vacancy rate at 5.2 per cent and 2.3 per cent effective rent growth for the year.
New tax rules also bode well for the investors who were already admirers of the asset class. “Several provisions of the tax reform law are favourable for apartment owners, both private and public (REITs). These changes will help to maintain a very healthy interest in multifamily investment and help maintain high acquisition volumes in 2018,” CBRE projects