We Actually Need to Build More Luxury Homes. Here’s Why.
Let’s think about the housing market of 2030 when middle-aged millennials in their high-earning years will be looking to trade up.
Dreams with frills.
Photographer: Patrick T. Fallon/Bloomberg
There is broad agreement that the US housing market needs more homes . There is also broad agreement that affordability needs to improve. But it doesn't necessarily follow that we should build more affordable homes.
Stepping up housing production is a multiyear process, which means we should be thinking about what the market will look like in 2030, not what it looks like now. By then, middle-aged millennials in America’s largest generation will be at their peak earning potential, seeking luxury digs or to trade up rather than entry-level or affordable homes. Understanding and catering to these changing needs will ensure the right kind of supply and, counterintuitively perhaps, improve overall affordability.