Because people's housing needs change as they get older, shifting age demographics can affect market demand for various home sizes and types. Research shows a decrease in numbers of young adult and middle-aged homeowners and an increase in senior homeowners. Meanwhile, most homeowners are middle-aged.
As households age, so do their housing needs, including home size and amenities. Young adults may need smaller homes, middle-aged households with children prefer bigger homes, and seniors may prefer smaller homes or retirement homes. Likewise, as the distribution of people by age changes, so does the distribution of homeownership by age. Awareness of these shifts can help real estate professionals coordinate and balance supplies of homes with the market demand for various home sizes and types.
Comparing Texas, U.S. Homeowners
Recent Real Estate Center research shows a downward trend in young adult and middle-aged homeowners in both Texas and the U.S. but an upward trend in senior homeowners (for a breakdown of how the U.S. Census Bureau defines these age categories, see Table 1).
Texas' population is younger than the nation's. From 2014-18, the state's average median age was 34.4 years compared with 37.9 years for the nation. This difference is reflected in the state's distribution of homeownership by age. In 2018, young adults owned 29.6 percent of homes in Texas compared with 25.5 percent for the U.S. (Table 1). Shares for this group are falling in both the state and the nation (Figure 1).
The young adult category consists of two age brackets: those under 35 and those 35-44 years old. The market share of Texas homeowners under 35 years decreased from 13.4 percent in 2010 to 11.2 percent in 2018 while the nation's decreased from 11.7 to 9.9 percent (Figure 2). These homeowners, who are under 37 years in 2020, are mostly Generation Z and younger and older Generation Y (millennials). The market share of Texas homeowners 35-44 years old decreased from 20.7 percent in 2010 to 18.4 percent in 2018 while the nation's decreased from 19 to 15.6 percent (Figure 3). This group includes younger Generation X.
In 2018, middle-aged homeowners accounted for the largest shares of owner-occupied residential units in both Texas (43.9 percent) and the U.S. (43.7 percent) (Table 1). In both the state and the nation, the market shares of homes owned by middle-aged residents trended upward until 2014, then they began a downward trend (Figure 4).
This group consists of homeowners age 45-54 and 55-64. While the market shares for the 45-54 group are trending downward, the 55-64 group is trending upward. The market share of Texas homeowners age 45-54, mostly older Generation X, decreased from 24.2 percent in 2010 to 21.8 percent in 2018 (Figure 5). Meanwhile, that demographic's share decreased from 23.8 to 20.7 percent nationally. The share of Texas homeowners 55-64 years old, mostly younger boomers, rose from 19.6 percent in 2010 to 22.1 percent in 2018, while the share nationally increased from 20.6 to 23 percent (Figure 6).
Texas seniors' share of owner-occupied residential units in 2018 was 26.6 percent, lower than the 30.8 percent national average (Table 1). Shares for this demographic trended upward both in Texas and nationally (Figure 7).
Three age brackets comprise the senior demographic: 65-74, 75-84, and 85 or older. Texas' market shares for all three brackets have stayed smaller than the corresponding shares for the nation due to the state's younger population.
The 65-74 demographic, mostly older boomers, has the largest share of housing units owned by seniors (Table 1). In 2018, the market share for this group in Texas was 15.9 percent, up from 12.4 percent in 2010 (Figure 8). The nation's share increased from 13.4 to 17.9 percent over the same period.
Texas' share of 75-to-84-year-old homeowners rose from 7.5 percent in 2010 to 8.1 percent in 2018, while the nation's increased from 8.7 to 9.4 percent (Figure 9).
In both the state and the nation, seniors 85 years or older own the smallest shares of residential units—2.6 percent in Texas and 3.5 percent in the U.S. in 2018, up from 2010's 2.1 percent for the state and 2.8 percent for the nation (Figure 10).
Texas Metropolitan Homeownership by Age
At 38.9 percent, Odessa led Texas Metropolitan Statistical Areas with the largest share of residential units owned by young adults in 2018 (Table 2). Sherman-Denison had the smallest share at 23.3 percent.
Odessa also had the largest share of homes with middle-aged owners (57.4 percent), and Sherman-Denison again had the smallest (42.1 percent).
Tyler had the largest shares of homes in the senior bracket (35.2 percent), while Austin-Round Rock had the smallest (21.8 percent).
Dr. Anari (email@example.com) is a research economist with the Real Estate Center at Texas A&M University.