Don't Like Children? You're In Luck! (Especially If You're a City Dweller)

Our outlook for the nation's population points to a declining number of youths in the coming years and the latest trends reveal a clear geographic divide in where the youngest residents live, reshaping expectations for the housing stock and public services like schools.

Stemming from our latest demographic update, A Decade Divided, we forecast the under-18 population stands 5% below the level 10 years ago in 2016 and will stand 8% below that level by the end of the decade. Looking ahead to the next decade, all else equal, this points to less demand for entry-level rental housing. Looking further ahead, this will eventually result in softer demand relative to supply for the single-family asset class as aging Baby Boomers increasingly vacate homes.

In order to quantify the impact of a smaller youth population on urban and suburban areas, we rely on our proprietary Geo Descriptor Index (GDI), a 0-to-100 measure of how urban or suburban a given area is. A score near 0 reflects a highly suburban or exurban area with predominantly single-family housing and low overall density while a score closer to 100 reflects an extremely dense, public transit-oriented urban core, dominated by multifamily living.

Focusing on the near-term impact, the split between urban and suburban trends is already having tangible implications. For instance, as of 2024, the population of children under 10 years old stood 3% lower than the level 10 years prior in the most suburban areas (GDI under 20) but had declined by 13% in the urban cores and surrounding areas (GDI 40 and higher). 

What does this mean for real estate and life in more urban regions? On the positive side, it may be possible to concentrate more resources on this smaller group of children. For instance, New York state recently mandated maximum class sizes for its public schools; with New York City comprising just under half of the state's population and its schools typically having limited ability to add classrooms, a smaller population has likely made it easier to meet that mandate. On the housing side, softer demand from families may reduce the need for larger urban units with three- or four-bedroom and child-centric building amenities, nudging developers toward smaller units and amenity packages geared more toward singles, couples, and older residents.

So if you don’t like children, the city may be getting more to your liking, though builders, schools, and landlords who relied on them may have some rethinking to do.