Bill McBride is like an economic prophet who nailed the housing crash in his Calculated Risk blog that suddenly became incredibly popular after his predictions became true.
Besides housing, his predictions in most other economic aspects are also right. Now, he has a new big story coming up. He tells about a big demographics tailwind headed to the United States economy.
More babies in 2013
McBride observed that there are more babies born in the US in 2013 compared to the past several years.
Early-20s to Late-20s demography means favorable housing market
The largest population cohort in USA now is the 20-to-24 demographic, according to McBride’s observation in June.
He said this is very critical because this very large 20-to-24 year old population will become 25-to-29 year old in a few years. The latter will start earning better income and will start buying houses and cars.
Right now, homeownership is sluggish, but when these large demographic turns at the right age, the winds will blow in a different direction and things will go favorably for the housing market. From renting apartments, this large demography will start buying houses.
McBride, in his Twitter, said 25 to 32 years old is the age when people start having babies, and having babies means buying houses and other necessities.