Homebuilders aren’t building enough for millennials

That generation is expected to be the largest single cohort of homebuyers next year, but the nation’s homebuilders are not keeping up. This is already exacerbating the shortage of homes for sale and for rent nationwide, but will especially hurt affordability for millennials (those born between 1981 and 1997).

While the majority of both single- and multifamily home construction is in millennial-dense counties, it actually lags the rest of the nation when it comes to meeting demand. Millennial counties, defined as geographic areas where at least a quarter of the population consists of this demographic group, account for 62% of the entire U.S. population, but they account for just 59% of single-family homebuilding, according to the National Association of Home Builders’ Home Building Geography Index, or HBGI.

“On the surface, these numbers look similar, but you would expect the single-family construction share to be higher in millennial intensive areas, which tend to feature greater amounts of household formation and population growth that require additional housing,” said NAHB Chief Economist Robert Dietz.