Homeownership trends for buyers without children

The U.S. and global fertility rates have been in decline for years, and the COVID-19 pandemic only amplified this trend. US births saw a steep drop in the first year of the pandemic but then slightly rose in 2021. However, the number of babies born is still lower than before the pandemic.

OK, so you’re likely thinking ‘I came to this blog to learn about co-buying, so why in the world are you telling me about birthrates?’ Well, this trend is causing ripple effects on the U.S. housing market, too.

Looking at buyers who have children under the age of 18 in the home, the share has declined from 58% in 1985 to just 31% in 2021. Why does this matter? Because this trend has significant implications for home buyers. What is important to a buyer with children will be different than what a child-free buyer requires in a home.

A few of the ways this impacts housing includes:

1. Location preferences

The location preferences for those homebuyers with children versus those without children differ considerably. Homebuyers with children often base their purchasing decision based on schools. Fifty-three percent of parents rate the quality of the school district and 50% rate convenience to schools as a high priority. In comparison, just 11% of non-parents rate school quality as important when buying, and 7% rate convenience to schools as important. Buyers without children said their neighborhood choice was more influenced by convenience to friends, family, shopping, and entertainment.

2. About of space needed

For homebuyers with children, space is a necessity. About 19% of homebuyers with children in the home rate the top reason to buy a new home as being for more space. For child-free homebuyers, only 6% buy a home for more space. Typically, parents purchase a home that has four bedrooms with 2,200 square feet, while homebuyers with no children typically purchase three-bedroom homes with 1,800 square feet. According to Robert Dietz, chief economist at the National Association of Home Builders, people generally, look for 800 square feet of home per person in the household.

3. Type of housing desired

About 90 percent of buyers with children younger than 18 at home bought a detached single-family house, according to the National Association of Realtors’ 2021 Profile of Home Buyers and Sellers. But for those without children at home, that number fell to 79 percent. Instead, more chose townhouses and condos. Part of the reason for this trend, besides wanting less space, is people without children tend to prefer urban areas. There is a strong desire and preference for wanting to move closer to the city. Expect the demand for condos and townhouses to strengthen in the future compared to McMansions, which use too much land to remain cost-effective in most urban areas. Popular wisdom says buying a home is usually the last step in a series of three milestones: getting married, having a baby, and buying a property. But that is no longer the case—as evidenced by the statistics. Whether people have children or not, more popular wisdom is telling them that with or without children, it’s wiser to make investments and look out for their financial future. That often starts with buying or co-buying a home.

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Nestment, Inc. does not guarantee and is in no way responsible for the accuracy of information provided in this blog post. All information is provided “AS IS” and with all faults. Data presented here may not reflect all real estate activity in the market.  While the information on this site is about legal and tax issues, it is not intended as legal or tax advice or as a substitute for the particularized advice of your own attorney and tax professional.