Housing Boom to Last 20 Years?

Spurred on by demographic factors, the housing boom now under way will last into the third decade of the century, according to a report co-sponsored by Masco Corp. and Pulte Homes Inc.Titled "The Housing Boom: Another 20 Years of Growth," the report takes issue with economists who fear a decline in home values and a major falloff in construction. "Demographics is the single most important element in the housing equation because the number of households create[s] a floor and a ceiling on the number of housing units demanded," writes Al Ehrbar, a partner in the New York-based Stern Stewart and Co. consulting firm and the author of the report. A "careful weighing" of variables such as immigration, aging Baby Boomers, and housing affordability suggests that the new-home market will be "enormously" strong, he said. Projections by the U.S. Census Bureau indicate that households will grow by nearly 24 million from 2000 through 2020, the report says. Mr. Ehrbar said the housing market's performance in the recent recession augurs a "radical new role" for housing. "Housing went from being a safety valve at the inflationary peak of the cycle to acting as a safety net on the downside," he said.