The housing market isn’t just cycling through its usual ups and downs—major shifts are happening that will reshape how agents, investors, and builders operate for the next decade.
Lance Lambert broke down nine long-term housing trends that aren’t going anywhere in a recent ResiClub article.
These aren’t passing fads.
They are fundamental changes that could impact demand, supply, affordability, and even the way real estate is financed and built.
Byron Lazine broke it down on today’s Hot Sheet:
1. Smaller Households, Smaller Homes
One- and two-person households are rising, driven by delayed life milestones, lower birth rates, and an aging population. The trend is reshaping home demand, with builders shifting toward smaller, more affordable homes for first-time buyers and downsizers.
Byron commented on the change in household size over the years:
“Think about how many people you know who have more than three kids. And it’s really just one generation later.”
Meanwhile, one- and two-person households have steadily increased in number, largely due to three main reasons in Lambert’s report:
- Delayed life events (college, marriage, homeownership, parenthood…)
- Declining birth rates (more on that up next)
- Aging population (as the average age skews older, more people live alone)
2. U.S. Population Growth is Slowing
Back in 2008, the Census Bureau projected 439 million Americans by 2050. Today? 361 million—a difference of 80 million fewer people. This slower growth could ease housing shortages long-term but may lead to softer demand in some markets.
As Byron pointed out during the Hot Sheet, the falling birth rate could be a key factor behind Trump’s “gold card” proposal.
This will have a bigger impact on the U.S. economy overall. It’s one of the reasons why, while the administration ran on deportation of illegals, at the same time they’re saying, ‘Oh, we want to sell $5 million gold cards.’ Because if you don’t have immigration coming into the country, with this population forecast, that’s going to mean long-term trouble.
3. Birth Rates Are Dropping Globally
It’s not just the U.S. that’s seeing declining fertility rates. Many developed countries aren’t producing enough births to sustain their populations, meaning long-term demand could shift toward areas attracting immigration and economic growth.
4. Homebuilders Are Going Smaller
For decades, despite shrinking household sizes, new homes kept getting bigger. That trend peaked around 2014 and has been reversing ever since. Today, builders are focusing on smaller, more affordable homes—a response to both affordability challenges and changing buyer preferences.
5. Remodeling Boom Ahead
Locked into ultra-low mortgage rates, homeowners are choosing to renovate instead of move. Aging housing stock + record home equity = increased remodeling activity. This shift benefits contractors and agents who adapt to a slower-moving resale market.
To illustrate the difference between regional markets, Byron explained why he tells anyone looking to buy a home in Florida not to buy anything built before 2000.
There’s so many homes built after the year 2000 with better construction for protection against hurricanes…[but] when you go to the Northeast, try finding a home before the year 2000 available on the market. It’s like Where’s Waldo?
6. Baby Boomers Are Selling—Slowly
Freddie Mac predicts 9.2 million fewer Boomer homeowner households by 2035. For now, demand from Millennials and Gen Z offsets the shift, but by the 2030s, an inventory surge could reshape supply dynamics.
7. Home Insurance is Becoming a Crisis
Between 2020 and 2023, home insurance premiums jumped 33%, with Louisiana and Florida hit hardest. Rising disaster risks mean some regions could become uninsurable, limiting mortgage availability.
8. Build-to-Rent is Here to Stay
Institutional investors are all-in on build-to-rent (BTR) communities. In 2023, 9.5% of new single-family homes were built as rentals, a record high. This trend is cementing rental housing as a key asset class.
That said, some markets are more favorable for BTR than others.
It’s the Sun Belt states where a lot of this building has taken place, which is going to continue to increase inventory and is going to continue to put pressure on the for-sale inventory as we’ve seen in those locations as well.
9. Big Builders Keep Taking Market Share
Publicly traded builders like Lennar and PulteGroup are squeezing out smaller competitors, leveraging access to capital, in-house mortgage firms, and economies of scale to dominate new construction.
Byron explained why, starting with the fact that big builders have economies of scale; they’re able to get cheaper labor and cheaper materials. Meanwhile, smaller local builders are all but forced to build homes priced well above the median.
It’s prohibitive for a local builder to build a regular house. They’ve got to go luxury. The best builders have gone luxury. Because they’re like, ‘It just doesn’t make sense for me not to go luxury.’ It’s too prohibitive for a local builder to take the risk and build a regular home for such a short margin when there’s luxury buyers out there.
The Bottom Line
These trends aren’t short-term fluctuations—they’re shaping the future of housing for decades to come. The agents and investors who adjust their strategies now will be the ones leading the market in the years ahead.
