The American household. It conjures a picture. You've probably already got that picture in your mind. Now, let go of that picture.
By the latest available Census count, there's northwards of 125 million households, a figure that makes our fixed focus on benchmarks such as new single-family home sales seem like a game whose rules, wins, and losses all take place in the statistical rounding-error margins of housing's real housing economic landscape. Two out of three of those--about 82 million--the Census calls "family" households, and about half of the 125 million total are "married couple" households.
So, what is "typical" when we say or think or design for or market to households?
Now, even when you're talking about half of 125 million households, single-family new-home sales of 600,000 or so are still over in decimal-place land. There are a lot of households that may match up to the first image that springs to mind when the term American household gets mentioned. As a matter of fact, data and graphics journalist and Flowing Data contributor Nathan Yau pored through the Census' American Community Survey from 2010 to 2014, and counted 10,276 household composition variations that express the diversity of households made of different combinations of related and unrelated people. Yau is a master of visualizing American household change. His work can help us begin to change the hard-wired snapshot that comes to mind as we conjure that first picture of "the who" inside households.
Now, this is important. The household is where two-thirds of the United States economy happens; it's the foundational engine that blends earnings, savings, spending, and debt into the present and future of local, regional, and national business and government viability.
Trying to know "the who," who your potential customer is, what he or she needs, and how your home, or neighborhood, or location meets that need is a practice and a process that's never perfected. It's as fluid and dynamic as living itself. Households, for instance, for a brief impressionable time, seemed homogeneous. The snapshot, a married-with-young-children household, etched its way in as quintessential. Married with children households accounted for three out of four American households up until the 1970s. Now, no longer. Far from it. And the variations crop up faster and faster.
This alters "the who" as you picture your customer and his or her needs.
Here's Nathan Yau's different sort of look at a question that's a constant in home builders' minds as they plan, develop, design, market and price, the question of exactly who home buyers and prospects are these days.
Yau explores household composition as atomic structure, with 50 of the 10,276 household types serving as the "power law" of households, comprising 94% of all the possible combinations and variations of households. He writes:
Relationships are relative to the surveyed head of household. Larger circles are (mostly) adults, and smaller circles are children or grandchildren. Circles are colored dark green to show the householder’s family nucleus, light green for family members outside the nucleus, and gray for non-relatives, which includes friends and partners. Connecting lines represent marriage and children, or the householder’s family nucleus.
So, you know what? A run-rate of 592,000 single-family new home sales comes down to about 1,620 a day, which is a little over one new single-family home sold per minute of each day. That's impressive, and it's worth a word of encouragement to your sales, construction, marketing, and office-support teams for making that happen amidst oft-noted headwinds.
But imagine, too, if we start sync-ing up offerings with the needs of households. Not the ones that come first to mind, but the ones that are reshaping household composition in America as we speak.
Find out more about what you want to know about how demographics impact home building and development here, and register for our HIVE conference Sept. 28 and 29 in Los Angeles, which will feature demographer Dowell Myers here.