Why America Won't Hit 1.3 Billion People (and What It Means for Housing)

By Nick Krautter

Nick Krautter is a Portland-based real estate professional, market analyst, and author of The Golden Handoff: How to Buy and Sell a Real Estate Agent’s Business, which debuted number one on Amazon for mergers and acquisitions.

In 1775, a year before the Declaration of Independence, a Harvard professor did some math that excited him. The colonies were doubling in population every 25 years, and if that pace held, he figured America would be home to 1.3 billion people by right about now, our 250th anniversary. We didn’t get there. We’re at about 340 million instead, and the distance between his number and ours turns out to say a lot about where housing is headed. If you want the deeper history, here’s the full write-up of that 1775 forecast.

Populations grow fast at first, then slow down. Back in the founding era, the average person was having a lot of kids, so the country was small but growing quickly. That’s how it usually goes early on. As economies and countries mature, though, that growth starts to flatten out, and in some places it tips into decline. You can already see it happening in more advanced economies like Japan, where homes out in the countryside sell for next to nothing because there just aren’t enough people to fill them. That’s what population decline actually looks like on the ground.

We’re not having enough kids, and migration isn’t filling the gap. To hold a population steady, you need a fertility rate of about2.1 births per woman. Right now we’re at roughly 1.6, and it’s still falling. What normally makes up that difference is migration, and for 250 years America has been the beacon that pulls in the best and the brightest from all over the world. Lately we’re not seeing that same level of in-migration, so the one thing that could offset a low birth rate isn’t doing it.

Real estate has watched the boomer wave for decades. For a long time, the demographic story people in real estate have paid the most attention to is the cycle of the baby boomers and the millennials, the two biggest groups to come out of the population data over the last 60 years. The boomers are now in their 70s and 80s. Before long, they won’t need their homes anymore. They’ll be moving into assisted living or passing on to the great beyond, and that’s a lot of houses eventually coming back onto the market.

A housing shortage could become a surplus. Boomers aging out of their homes, migration staying low, and not enough kids to replace ourselves. Stack those on top of each other and the population levels off, then starts to decline. It won’t happen tomorrow. But over the next 10 to 20 years, we could see today’s housing shortage swing the other way into a surplus, and that’s a very different market than the one we’re used to planning around.

Every state tells a different story. Of course, that’s the whole country, and the country is made up of states, each with its own population trends. I’ll dig into that state-by-state picture in another video. But on the big question of whether America ever reaches 1.3 billion people, the answer is no, and probably never. The good news is we’ve got plenty of food and land for everyone. We just need to keep growing enough to support the economy and our future.

If you’re curious what’s happening with population changes state by state, head to Sell PDX and download a report on U.S. migration patterns over the last couple of years. And if you’re thinking through what any of this means for your own move, I’m always glad to talk it through. Call or text me at 503-901-8100, email me at nkrautter@gmail.com, or visit sellpdx.com. I’d be happy to help.