With all the popularity that multifamily has seen in the last few years and the recent news that construction of multifamily buildings with five or more units has seen a 10% boost this year to now total 35% of the U.S. market’s total units constructed, we thought it might be interesting to take a look at this current trend and what it means for the multifamily industry in the next half decade and beyond.

When looking forward at what we see coming to the multifamily industry in 2020, we first take inventory of the changing events that have brought us to where we are today.

For example, after the struggles that came about by way of the housing crisis, many long-time and would-be owners saw their attitude towards the dream of homeownership change.

For many young and near-retirement aged adults, the upheaval of the housing market left a lasting impression that has many of them questioning the real value of homeownership, especially at this stage of their lives. The sudden and total collapse of the market pulled the rug out from underneath those that dreamed homeownership to be a guaranteed stepping stone to a wealthy existence and ended up costing them everything that they had worked for their whole lives.

Demographically speaking, young adults between the ages of 20 and 34 and the older adults who are now over 60 are seeing a rapid growth in their populations. These two groups are showing more and more signs that they prefer the simple value of renting over owning.

Even with the rental market for single-family homes being the strongest it has probably ever been, the idea that today’s renters can get more “bang for their buck” from a multifamily unit–while enjoying a home that requires less maintenance and comes with more luxury amenities–is seen as a winning proposition.

In addition, as we’ve seen increased community support through shopping local and an increased focus on conserving energy through green efforts, a lot of what today’s multifamily communities offer is seen as more desirable: from their location within the city that is closer to most people’s places of employment to the fact that these communities are a walkable distance to the places renters want to frequent during their off time like boutiques, fresh grocers, and hip new bars and restaurants.

It is in these additional factors that we can get a look at what’s in store for the year 2020. It’s on these ideal foundations that multifamily developers will have to adjust to and cater to in the coming years, as this way of life becomes more ingrained as the norm.

Moving forward, we can expect the influences of both the millennial crowd and the retiring generation to continue fueling change and the explosion of these two specific populations to warrant the strong growth in multifamily construction up until the year 2020.

Based on current population trends,  this push will begin to taper off in 2020, especially for this younger demographic, and will see almost no additional growth in the decade that follows.

Experts do cite, that in the decades following the year 2020, that we will see some changes take place as older adults pass on and the young adults get married, have children, and then begin to migrate back towards the single-family market to raise their families.

Do you have any predictions about the multifamily industry in the year 2020? If so, please feel free to share them with us in the comment section below.