Household formation and home ownership in the District: millennials and Gen Xers are dominant forces of change

Compared to the rest of the nation, homeownership is lower across all age groups in the District.  The largest differences are for millennials and while the gap narrows by age, it never fully closes. Millennial heads of households are nearly twice more likely to own the homes they live in across the entire nation compared to the District. There could be many reasons for this: high prices in the District, or delayed family formation for the millennials.image002

We already know that the prices in the District are high, and there is some evidence that millennials are delaying forming households. Here is how we see it: The recent population boom in the District can be largely attributed to inflow of young people. Of the nearly 75,000 net increase in resident population between 2000 and 2013 (the latest year for which age breakdown of the population is available), 51,000 come from those between the ages of 20 and 34 (comparable to today’s millennials who were between the ages of 18 and 34 in 2014). This group now constitutes 32 percent of the total population compared to 27 percent in 2000.


However, millennials of 2014 are not forming households as fast as their comparable age group did back in 2000 (today’s Gen-Xers). Those under the age of 34 added more households to the District compared to older groups between 2000 and 2013, but each net increase in resident population in this age group resulted in a net increase of 0.5 new households headed by a similarly aged person. In contrast, those between the ages of 35 and 55 added about 3,000 new residents, but more than 17,300 new households. That is an increase of 5.6 households for one new resident from this age group.


Homeownership plays a role in this dynamic. For the young people under the age of 34, homeownership rates increased between 2000 and 2005, and suffered since then, first through the great recession and once again since 2011. This probably has to do with steep increases in home prices beginning early 2000s. In contrast, those between the ages of 35 and 54 defied the Great Recession, increasing their ownership rates by more than 4 percentage points (just as comparison, ownership rates for this age group declined by 6 percentage points since the great recession across the entire nation).


This is yet another picture of gentrification. We sometimes think of gentrification as something driven by young people. They move in, drive up rents and force low-income families out.  This data suggest, however, that the changing profiles of Gen Xers might be another key driver of socioeconomic changes in the District.  The dynamics of population for those between the ages of 35 and 54 suggest a great churn, with a small net increase in population but a large increase in household formation and homeownership, suggesting that the newcomers in this age-group are probably wealthier than those who leave.

What exactly is this data? Population data by age groups is from the U.S. Census. Homeownership and income data are extracts from the Current Population Survey data maintained by Miriam King, Steven Ruggles, J. Trent Alexander, Sarah Flood, Katie Genadek, Matthew B. Schroeder, Brandon Trampe, and Rebecca Vick. Integrated Public Use Microdata Series, Current Population Survey: Version 3.0. [Machine-readable database]. Minneapolis: University of Minnesota, 2010. The post uses the generation definitions from Pew Research Center.

7 thoughts on “Household formation and home ownership in the District: millennials and Gen Xers are dominant forces of change

  1. This is interesting. I’d love to read more about the mid to-late 30’s set. I imagine many of this group were not ready to buy houses when DC was much more affordable 10 years ago (we were in our mid-late 20’s then), so we missed the opportunities of some of the older folks in this age range that we are lumped into. 35-55 is a huge spread in ages as well as how well established someone might be financially, etc. I’d love to see this group broken down further, and how many of the lower end of this age set have bought in DC compared with the older set.


  2. Alexa makes a good point. The 8 year old bad economy put a big dent in the opportunities available to the young end of the 35-55 age range. The figures won’t get better till wages and confidence rise together. Unfortunately I don’t see the marketplace providing that backdrop currently or in the very near future.


    1. Hi Alexa and Travis-
      Thank you for your readership and your comments. It is not possible to breakdown the data for 35- to 39-year-olds, however, I have it for 35- to 44-year-olds: for this group, ownership rates went up from 43 percent in 2008 (first year of recession) to 55 percent in 2013. 2014 data suggest 49 percent, but subject to small sample problem. In the nation, the homeownership rate for the same age group declined through the same period from 67 percent in 2008 to 60 percent to 2013. 2014 is also 60 percent. For the 45- to 54-year-olds, the rates increased in the District from 47 percent to 55 percent and declined in the nation from 75 percent to 71 percent.


      1. Thank you for your response. Its useful to see this data- understood it can’t be broken down further but how fascinating if it could! Still so curious about ownership on the lower end vs. the higher end of even this segmented portion you presented, up to age 44. I often speak to people my age, in our mid-30’s find I am not alone in feeling like we are 10 years too young in terms of the turn DC took with prices. Great piece.


  3. I’m one of the lucky older millennial who are homeowner. From what I have seen from the difficulties of my peers, I think that the cause is two-fold. First, the recession put a serious dent out of the financial stability of people in my cohort. Second, it is impossible to afford anything in the D.C. area without two incomes.


  4. I’ve probably learned more about statistics with this blog then any schooling. #AmazingAgain #canyouworkformycompany


  5. I’m an older millennial, and a homeowner. Most of the older millennials that I know own, and they purchased recently. All of them while in their very early 30’s. It just takes longer to save for your first place in an expensive metro area like D.C. – which, let us remember, was extremely undervalued 15-20 years ago (just look at the fire-sale home prices in Logan Circle or H St around that time!) making comparisons between younger cohorts then and now relatively meaningless. It often takes longer to settle down and couple up too, and having two incomes makes more parts of D.C. affordable to a bigger swath of people. I’d wager the same is true in Chicago, LA, Seattle, SF, Boston…


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