USA – Property Returns Lowered by Ageing

The median age in America went up by a year in less than a decade from 37.2 to 38.2 between 2010 and 2018. According to the US Census Bureau, the 65-and-older population grew by over a third during the past decade and is expected to constitute 22% of the population in 2050 up from 16% today. A long term investment like property will almost certainly be impacted by this with outcomes for investors being vastly different based on where and what kind of housing they decided to invest in.

The geographic distribution by age below is based on annual American Community Surveys done by the US Census Bureau between 2014-2018. There is a clear band of younger people through the middle of the country while the coasts are older.

In the same vein, between 2014 and 2018, the coasts aged faster than the middle of the country. There is a clear trend of the average age staying the same or declining in Texas, Oklahoma, Kansas, Iowa and Wisconsin over these five years

This matters because the older the average age in an area, the higher the house prices, but lower the rental yield. The first chart below shows the relationship between average age and house prices. The $1.5 million+ club is dominated entirely by LA, the Bay Area and New York. Mouse-over points in the chart below to see cities

The chart below shows that the higher the average age, the lower the rental yield. The outlying 10%+ yields are to be had in Detroit and Flint, MI, while the 8%+ yields are mostly in Texas and the midwest.

The reason for this is that while 45% of 21-34 year olds rent their homes, only 14% of those over 65 do. Places with an older population have a limited demand for rental accommodation.

The average age of a place also affects the kind of accommodation that people will want to live in. Younger people are more likely to live in an apartment, perhaps because they’re more likely to live in the more densely populated parts of cities, which makes a case for investing closer to city centers.

The numbers for the 60 biggest US cities are:

City/Urban AreaAvg AgeAged 21-34 (%)Household IncomeAvg House ValueRental Yield
New York--Newark, NY--NJ--CT40.616.401313805280083.33
Chicago, IL--IN38.817.421026702922894.54
Atlanta, GA36.818.31923742597534.63
Philadelphia, PA--NJ--DE--MD40.217.641097533270114.19
Boston, MA--NH--RI40.616.651275394979473.02
Dallas--Fort Worth--Arlington, TX35.819.89932442591674.71
Los Angeles--Long Beach--Anaheim, CA38.620.701038887384072.51
Houston, TX35.220.13959192375505.24
Detroit, MI39.917.64894332186584.95
Washington, DC--VA--MD37.818.841395325233333.76
Seattle, WA38.320.241108714963903.25
Minneapolis--St. Paul, MN--WI38.518.471069343087314.28
Miami, FL41.317.72886713727344.29
Phoenix--Mesa, AZ38.918.58909183221224.03
Pittsburgh, PA42.617.01859731982084.38
St. Louis, MO--IL39.618.40885072231614.42
Tampa--St. Petersburg, FL41.217.64785842420355.13
Cleveland, OH41.516.41887032023864.98
Cincinnati, OH--KY--IN38.718.12905332166404.50
Baltimore, MD39.219.101135643760974.16
Charlotte, NC--SC37.118.98941882912924.02
Indianapolis, IN37.119.39866172109854.78
San Diego, CA38.121.761080906739402.92
Denver--Aurora, CO37.520.401041094102343.83
Kansas City, MO--KS37.919.44863012163564.52
Milwaukee, WI40.217.38929972657884.06
Providence, RI--MA41.317.57933603337553.41
Portland, OR--WA38.719.86947823964263.52
Orlando, FL38.021.10835802757884.76
Nashville-Davidson, TN37.420.80921093092163.95
Jacksonville, FL38.519.84795782297005.05
Hartford, CT41.317.201086722960424.25
Virginia Beach, VA38.021.78838992855294.46
San Antonio, TX36.220.67818922130875.34
Columbus, OH37.120.69903852251564.50
San Francisco--Oakland, CA40.119.9713935510374272.12
Riverside--San Bernardino, CA35.021.53835533529004.23
Raleigh, NC36.819.061016253044463.96
Birmingham, AL38.918.70824422266364.00
Bridgeport--Stamford, CT--NY40.715.141550606521252.65
Richmond, VA39.018.97907392714604.46
Louisville/Jefferson County, KY--IN39.418.32814532148824.09
Memphis, TN--MS--AR37.119.13751361817895.27
Austin, TX36.121.801102193778283.79
Sacramento, CA38.619.28945374027643.62
Knoxville, TN40.318.09764072219773.89
Buffalo, NY41.717.82793411834004.89
Las Vegas--Henderson, NV38.219.72792692852454.41
Oklahoma City, OK36.720.99779871985444.50
Springfield, MA--CT40.918.04881762611414.04
Poughkeepsie--Newburgh, NY--NJ39.517.581004903075554.32
Columbia, SC38.120.19744992010004.69
Allentown, PA--NJ41.716.11903132437924.66
Dayton, OH40.118.00751721636295.16
Rochester, NY41.017.77857511857085.91
Akron, OH40.618.25746751677565.13
Baton Rouge, LA36.920.59811682198634.45
Worcester, MA--CT40.117.121023073251383.58
Tulsa, OK37.619.00767361909214.54
Tucson, AZ41.218.35782662451234.37

The maps below show the average age by local area for each state. Select a state from the dropdown and mouse-over areas to see the numbers

Go next – Detailed U.S. Rental Yield Map