Jason Hartman’s guest in this Flashback Friday episode is Steve H. Murdock, former Census Bureau Director and current Professor of Sociology at Rice University in Texas. The two talk about the demographic shift happening, the factors affecting the population, and the potential effect of this current demographic shift throughout the country.
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Jason Hartman 0:09
Hey, this is Jason Hartman, thank you so much for joining me. Do you know what day it is? Yes, it is flashback Friday, where you hear the best of the creating wealth show and you hear some good prior episodes, some good review. Remember, we’ve got almost 500 episodes out. And you know what? iTunes doesn’t even hold them all if you’re an iTunes listener, if you are listening on Stitcher, thank you for joining us. So we want to bring you some good review stuff. Now. What’s interesting about flashback Friday, it’s a little scary for me. I got to be very, very candid with you on that. Because you the listener, you get the chance to hold my feet to the fire. Did I make any predictions? Was I right? Was I wrong? I’ve been right about a lot of things, but I’ve been wrong about a few. So you can give me a hard time about that if you wish. But it’s flashback Friday, and we will give you the uncensored Best of the creating wealth show with a prior episode. So let’s dive in. Here we go. Remember, this is not current. It’s flashback Friday.
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Jason Hartman 2:06
It’s my pleasure to welcome Steve Murdock to the show. Today he is with a hobby Center at Rice University coming to us from Texas and be somewhat booming state of Texas. Not completely, of course, but we’ll talk about that. And we’re going to talk about demographics. He’s a demographer and author of several books and has some interesting things to say about population shifts. So I think you’ll really enjoy the segment. Steve, welcome. How are you?
Steve H. Murdock 2:27
I’m fine. How are you doing, sir?
Jason Hartman 2:29
Good. Thanks. So what is going on with the major major shifts in population around the country nowadays?
Steve H. Murdock 2:35
Well, I think you know, this is, of course, exciting times for demographers such as myself, because we’ve we’re getting now in increasing amounts, the 2010 census data, and these data show some very interesting patterns. One One is, frankly, is that this has been the second slowest growing period in the history of the census, only the 1930s had slower in terms of percentage population growth, but at the same time, we had 27 point 3 million people to the American population, we added that primarily in the south and the West with with over 85% of the growth being in the south in the West. And, Steve, when you say we added you’re talking about within the last 10 years, since the last 10 years, I’m sorry, looking at that period of time, and you can you can see the for the look in percentage terms or numerical terms, those increases, you know, if you where they are, for example, if you take the the 10 largest states in terms of numerical population increase from 2000 2010, they were and I’ll just read it read a list here, Texas, California, Florida, Georgia, North Carolina, Arizona, Virginia, and Washington, Colorado and Nevada. So they’re all in the West himself. And that doesn’t mean there aren’t significant populations, certainly, in New York and other places, simply says that we’ve seen this shift in population from the from the northeast of the Midwest, to the south and the West, basically a shift from the beginning of the 20th century, where 62% of the people lived in the north eastern Midwest and in 38%, living in the south and west, to as of 2010 40%. Live in the northeast, in the Midwest and, and 60% live in the south and west. So one has been this overtime shift from the Northeast and Midwest to the to the south and west. So that’s been a major pattern. We see it, you know, phenomenal growth, not just the dwell on Texas. But you know, Texas added 4.3 million people to its population, a full 900,000 greater than California, which is a state that is 12 million larger.
Jason Hartman 4:35
So let me let me ask you a question about that. The shift from the northeast I mean, is that pretty much as Billy Joel told us, they’re closing all the factories down in Allentown. I mean, is it just the shift from AI for better or worse and sometimes for worse, in many ways America shifting its manufacturing base overseas or what what do attribute that to?
Steve H. Murdock 4:53
Well, I you know, I’m not an economist, but I think the shifts certainly are the lie of the the mean Show very clearly, what we’re seeing in terms of shifts of industries to the south. And to the west, I think some of it has to do with the width as well, with the composition of the populations in the south and west, versus Northeast and Midwest, for example, one of the things that I tell people is when you look at states across the country, you can basically say, if you are not diverse, you are not growing. So that when you look at, for example, minority populations in America, and you look at at that composition, what you’ll see is that, that the vast majority of African Americans and Asians of Hispanics are in the southern and western states. And you’ve take some of the midwestern states a very, very slow population growth example of that would be a place like I want to have relatively slow population growth, but the Great Plains of the United States, certainly, when we looked at the largest cities, for example, we were startled to see that that Chicago lost 200,000 people. So it’s a combination of factors. But certainly there’s a strong economic factor, as we’ve seen more growth in in, as you say, in factories, but in all kinds of businesses in many Southern locations. And that coupled with I think, growth in the population segments that are the fastest growing segments of the of the US population,
Jason Hartman 6:22
they’re very interesting. So also, I think another thing we might attribute it to is maybe the aging baby boomers, for example, I can’t tell you how many people I’ve spoken with or met or heard about that live in, say, Michigan. Now, of course, economic factors are driving people out of Michigan, for sure. But they once they retire, they’re thinking like forget this cold weather, I’m going to move to Texas, or maybe Florida or a southern state where it’s much more pleasant place to live in terms of weather. Remember, you’re listening to flashback Friday. Our new episodes are published every Monday and Wednesday.
Steve H. Murdock 6:55
Yeah, I think we’ve seen some of that. Certainly, we’ve seen some of that in a in the various stages. You talked about the the Arizona’s the Texas, the Florida’s and other states, and particularly in the in the southwest, so that there’s been certainly some falling event. And I think that the largest phenomena had been economic. I don’t think there’s any doubt about that. But certainly, the ageing of the population has has had a couple of effects. And one is that in general, when we talk about the Northeast, Midwest, they are older populations than they are in the south, and Western. And you see a you know, you see a very marked difference. Let me just give you an example. I was asked by a reporter, when our data protections were first coming out to kind of give a modal text and I said, Well, I can’t do that. I said, because the majority of Texans now or minority group members, although non Hispanic whites are still the the largest single proportion that so I said, let’s look at let’s look at two, let’s look at a kind of a modal, a non Hispanic white. And that turned out to be a woman 40 to 44 years of age, and the mortal non Anglo are nonetheless medic white, and the mobile minority group member was an Hispanic male 25 to 29. So that’s, you know, that’s a 10 year over 10 year difference. And that’s, that’s a major difference. Difference demographically. So, you know, you’re seeing a combination, a mixture of age, race, ethnicity, economic and other factors, all playing roles, as we kind of shift our popular population around from from one area to another. One
Jason Hartman 8:33
of the things you mentioned earlier in the talk here was that this is the slowest growth since really the Great Depression in terms of our population, in terms of percentages, in terms of percentages. So you know, is that is that because the immigration, especially from the south from Mexico has really slacked off for those anti immigration people. This is maybe one benefit of a bad economy. I mean, they’re they’re not coming over as much as they used to, because governments aren’t flush with cash to give out for teittleman type programs. And there aren’t the jobs here either. Right?
Steve H. Murdock 9:02
Well, I think I think more of it, frankly, was just the general economic slowdown of the latter part of the decade, because the growth was going pretty well until that period of time. And then we saw a slow down. I think sometimes people misunderstand that. When you look at we don’t have the final 2010 data on this. But when you look through through 2009, you know, basically two of every three new Americans that we add are added through birth. And so immigration is about 35% of our of our population growth. And that’s both legal and undocumented immigration, undocumented. Now, I think, pew Hispanic center and homeland security both have about the same number, somewhere around 10.8 to 11 million nationwide. So that’s a force but I think, I think a good deal of it. We have, for example, the lowest immigration right now that we’ve had in in numerous decades, we’ve got the The lowest birth rate we’ve had for long periods of time. And that’s across racial and ethnic groups across states across areas. And so there’s been a kind of I think people are taking stock of where the economy is and saying, Wait a minute, I’m probably going to stay where I am for right now. And I’m going to have to watch my resources, my, my investments a great deal more carefully than I have had to sometimes in the past.
Jason Hartman 10:26
Just a reminder, you’re listening to flashback Friday, our new episodes are published every Monday and every Wednesday, we look at the ethnic component of populations, if we look at the US, and then we look at Europe, and I mean, Europe is, is dying, isn’t it? It’s just a and Russia is just evaporating? I mean, there’s just not the fertility rates of the
Steve H. Murdock 10:50
past. Right, right. Well, you know, one of the things that you see is, if you take Europe as a whole Europe is the slowest growing region of the world, it is the oldest in terms of mean, there are some exceptions, that Japan, for example, is a very old country. But in general, if you look for the oldest places, you look for the places with the lowest fertility there in Europe, and one of the things that I that I tell people is when you look at our population, and look at the various racial and ethnic groups, one group, the non Hispanic white population, you know, takes its heritage primarily to Europe. And so it’s not likely that, that we’re going to have a lot of European immigration simply because the numbers are small, and the age structure is old. One of the big differences and not the only one, but one of the big differences between our population. And the European population, is the degree to which we have very large minority populations that are younger, particularly in the case of Hispanics generally have higher fertility rates. And our growth is increasingly, you know, dependent on on minority populations. For example, in this decade, we’ve just gone through basically 71% of our increase seven of every 10 new Americans were minority group members, you know, Hispanic, African American, Asian, American, Indian, etc. And when you when you look at the growth, growth of the United spending white population, for example, it grew by only 4%, from 2000 to 2010, Spanish grew by 30%, Asians grew by 47%, etc. So, so our girls and and the difference between us and and Europe, in many ways is increasingly due to our our minority populations.
Jason Hartman 12:35
Well, a couple things on that, Steve, number one, what you mentioned to me, is that a change in that in now we’re talking about the US and I just want to ask about Europe in a moment, but a change in that in the US is very unlikely, because the average, what did you say before you told me before when we were chatting, the average white female is is what 41 years old now or something?
Steve H. Murdock 12:54
Yeah, I think the average, I think the average Anglo females right around 4441 years of age. And when you begin to look at that non Hispanic white population, here’s the kind of things that really mitigate against coming back to some kind of rapid growth. First of all, fertility for non spanic whites has been below replacement for a couple of decades now, their age structure now is getting to be so it would be difficult to reverse that in any kind of biological sense, in terms of immigration to replenish that population, the primary source of that would be Europe, Europe, has one of the oldest populations in the world, it is a population that is not as at even lower fertility in many, many areas, and then the non Hispanic white population in the United States. And hence, it’s not going to be a likely source of immigration. So if you do away with high natural increase, because your population is older, and your birth rates are low, and you’re not, you’re not likely to get immigration, well, then you have a component that’s likely to decline as a proportion of the population. And, you know, we saw about a nine by almost a 10% shift in the proportion of the US population that was non Hispanic, like,
Jason Hartman 14:07
that’s interesting. So a lot of our listeners here are landlords, and certainly everybody that plays a part in the economy in terms of having a job selling a product selling a service. If it wasn’t for that immigration, America would really have its economy shrink, wouldn’t that I mean, we’re really we we need that immigration, or we need to start having a lot more kids over here. Right.
Steve H. Murdock 14:29
Well, yeah, I mean, if you you know, if you would have looked at, you know, our Rajamouli change of 20 millions that we talked about, in terms of our of our total, our total population. You know, when you look at that, at that 27 million that we that we’ve talked about when you when you look at it in terms of who contributed what, what you see very quickly is that you know, the non spending of the 27 point 3 million that we added now Hispanic white accounted for 8.3% 55% of that growth, Hispanic increase the Hispanic amount of growth was 15. Point 2 million. So 2.3 for for non Hispanic, white 15.2 for Hispanics 3.7 million increase for African Americans, 5.3 million for Asians and then another 800,000 from a variety of groups. But it’s really quite startling when you say that the Hispanic, the African American and the Asian populations all contributed a larger absolute number of persons to our population growth, and in non Hispanic whites in this last decade,
Jason Hartman 15:40
have the numbers ever. I mean, this is really a an amazing time to study demographics, isn’t it? I mean, the numbers have never been like this.
Steve H. Murdock 15:49
Well, I’m sure there’s, I don’t know all the periods of time, but certainly in my demographic for last 35 years or so they haven’t been, you know, and we’ve had this preK, something we talked about that shift was in the young population, but we shifted our population by about the decline of about 6% in this non Hispanic white population as a proportion of the total population. And when you look under, you know, when you looked at under 18, then you had this 10% shift, you know, the under 18, population in the states is only 54%. Now, it’s very quiet now. And so when you go and when you look at that population, kind of, you know, with the kids being the future, what you what you saw in that population in the United States, from 2000 to 2010, as the number of non Hispanic white kids decreased, decreased by 4.3 million, the number of Hispanic kids by 7.5 million, African American kids decreased. Also about 244,000, Asians increased by about 1.7 million. So it’s increasingly, in other words, that our child population, clearly, without Hispanic population growth would have had an absolute numerical decline.
Jason Hartman 17:00
People talk about the graying of America, that certainly is a phenomenon. But But when you look at the graying of Europe, I mean, that’s nothing compared to the US. I mean, Europe is on the road to extinction, isn’t it?
Steve H. Murdock 17:12
There are there’s certainly an old population, and they’re going to have to either change some fertility patterns very quickly, or they’re going to have to allow for some form of immigration. But
Jason Hartman 17:22
when you speak of immigration in Europe, but you’re passed on that, I mean, there’s a lot of Middle Eastern and African northern African immigration through Europe, and that’s changing a lot of things over there. But what were you gonna say about that, sir?
Steve H. Murdock 17:34
What all I was gonna say is that in many ways, I think one of the things that it’s important for us to realize in the us is that if you took the minority population out of America, the population of non Hispanic whites in America would not look terribly different. It would be younger, but it would still be not all that dissimilar from European population. The difference between US and Europe is increasingly due to our our non Hispanic or minority populations. And in in a very real sense, I think we could say we have kind of two population groups in United States, we have an older aging, literally dying off the end of the age chart, so to speak, Anglo population, which is pretty fixed in numbers and aging, there are quite rapidly and then we have a young, very diverse minority population that will increasingly be the future of the country. And certainly of states like Texas, and California and others in California’s numbers were to me, we’re just just startling. It was the only state in the country that had a larger Hispanic population increased in Texas did. And it it gained somewhere around I think, 3.1 million Hispanics. But what was what was very telling to me was that in terms of Texas, population growth, it had about at the second largest increase in the country, 464,000 increase in the number of non Hispanic whites. Okay. California had a net decline of 860,000 non Hispanic whites, where are they going? Well, all over I go into Texas,
Jason Hartman 19:12
I know that to be the destinations.
Steve H. Murdock 19:16
One of the things that if people aren’t aware of I think is the might be is that for a large number of years, and I don’t know exact off the top of my head what the number but for a large number of years, if you looked at domestic migration, meaning migration within the United States, that component of California’s migration has been negative for a large number of years. They’ve made up for it in terms of population growth by a good deal of immigration and fairly high natural increase rates. But in terms of interchanges with other states domestic migration, they’ve been losing more people than they’ve been gaining now for for at least a decade.
Jason Hartman 19:55
Very interesting time. Let’s talk a little bit about aid segmentation a little more if we can draw Roll down some of that a little bit, because I think what’s really interesting, and we were talking about this off the air, but I live here in Orange County, California. And first of all, when I think real estate drives almost everything else in life, because it’s such a large portion of people’s expenses, their housing expense, and then also their cost of doing business and the prices, they pay it businesses, if you go to a restaurant in Newport Beach, California, they have to charge a lot more for for the food than they do in Phoenix, Arizona, because of the cost of the real estate and everything else that’s integrated in there. And so when when an area gets expensive, I say the population starts to age. But there are some exceptions to that, which are kind of interesting to me. And we talked about that, but gotta
Steve H. Murdock 20:46
speak on that if you want a little bit. Well, I think I think part of what we have happening is that is that due to a variety of historical, discriminatory, and other reasons, there are vast differences in the socio economic characteristics of different segments of our population. You know, just give the example I was looking at some national data today. And you know, if you look at 2009 data, which is the most recent we have on this from from the census, at least, the average non Hispanic white in America was making almost 60,000, the average Hispanic was making about 35 point 6000, the average African American about 35 point 4000, the average Asian about 63 point 7000. So that there’s very large differences. And so what partly what happens with that difference in real estate is that you sort people other ways as well. And so but in addition to that, you have underlying that pretty vast differences, and differences that we certainly need to address as a country through education and other factors if we want to maintain our competitiveness. But those are very, those are very substantial differences and not differences that haven’t mean their differences have been there for a while.
Jason Hartman 21:56
And so people are self selecting, right?
Steve H. Murdock 21:59
Well, self selecting in the sense that it’s some extent, yeah. In other words, or another way to say it is people probably go where they can afford to go right. Now. Now, you’ll find the course the the the support structure, the people doing lots of the work in that those restaurants you talked about won’t be living in the course in the condos on the beach. Right. And that, but there’ll be there because there’s jobs there. So we have kind of that dual labor market that we also do a culture they’ve been there. But I think that you’re right, in the sense that that, I think when you, for example, when you look at retirement areas, I think you’ve seen some in the south at least initially grow because they were cheaper places to retire, then there were some were in some other parts of the country. And so people who were more middle class could look at at retiring in someplace in the south or Southwest, and more likely to be able to do it afford it for the rest of their lives than was true in some of the places on the two coasts. So I think people have certainly, I mean, one of the one of the major, major determinants of, of migration is income and economics. We’ll be back in
Jason Hartman 23:15
just a minute.
Steve H. Murdock 23:19
What’s great about the shows you’ll find on Jason hartman.com, is that if you want to learn more about investing in real estate in different markets, there’s a show for that. If you want to learn 17 ways, rich people think and act differently. There’s a show for that. If you want to know how to get paid to borrow, there’s a show for that. And if you’d like to know why Amsterdam doesn’t take dollars, or why pools are for fools, there are even shows for that. Yep, there’s a show for just about anything, only from Jason hartman.com or type in Jason Hartman
Jason Hartman 23:55
in the iTunes Store. What is the trend in America in terms of living style? I mean, like to talk about household makeup and household formation. But but that really actually wasn’t this question. This question. I wanted to talk about suburbia and urban areas, and what are people doing now? I mean, certainly suburbia really became a factor after World War Two, I guess. And then leather town and all that famous sort of suburbanization
Steve H. Murdock 24:28
it. Is that still the trend? Absolutely. One of the things that you probably saw in the last couple of weeks was a was a press release, I think it came out of Brookings to where they analyzed the census data and showed that the major cities of America, many of the large cities had relatively slow population growth. We talked about Chicago only, you know, gaining about, I mean, losing population in absolute terms, but when you look at the growth, remember that the overall population In the United States, grew by about 9.7%. So if we look at that relative to, to the, you know, the cities of America, New York grew by 2.1%, la by 2.6%, Chicago went down, a Houston grew by seven and a half percent, Philadelphia by 0.6. Phoenix, by 9.4, the only one of the top 10, that grew by a larger percentage of that 9.7 was San Antonio at 16%. But the the, what’s your what you’ve got in many of these places is very dramatic increases, and very, in some cases, very multi ethnic increases in suburban areas. There’s a county, for example, right outside of Houston, that that Fort Bend County, is that one of the interesting things is if you look at their growth, they had, you know, 40 50,000 people, each from the non Hispanic white, the Hispanic, the Asian, and the African American groups. So a very diverse, very multi, multi ethnic growth and diversification. So suburban continues in Fort Bend County. And and this is a area right right west of county, right west of Harris County, where Houston is located. And so what what you’re what you’re seeing is that suburban areas are still growing more rapidly than are the large, old central cities.
Jason Hartman 26:27
There’s some argument you know, a lot of people argue against suburbia, because it uses a lot of gasoline, you have to drive places people are in their cars. And there’s one person that I follow. I haven’t had him on the show or anything before. But you know, he’s an author, and he’s got a show that he does. And he’s really saying that suburbia is in danger because of oil prices. But it doesn’t appear to be the case
Steve H. Murdock 26:48
so far. Well, I mean, you know, I don’t know what that might be in the long run. But I think the differences are really number one of those is, of course, as you talked about the cost of land and the cost of real estate. And if you look at what you can afford, in a suburban area versus what you can in, in downtown LA, or downtown New York or downtown, perhaps Houston, you’re going to be able to get more for less in in most suburban areas. And I think, certainly transportation cost as they go up will affect that. But you know, those differences have been the difference between housing costs in central cities versus suburbs has been a big factor for a number of decades, and at least through 2010 continued to be so
Jason Hartman 27:33
very good point. And you know, what I think is driving a lot of that is this gentleman. It’s James Kunstler, by the way, who I’m talking about. And he his argument is that fuel prices will make suburbia expensive. But I would argue that fuel prices impact the construction cost of urban properties much more significantly than they do driving to the grocery store in suburbia. Because when you build up those construction costs, just soar and high rise condos and so forth like that. Why? Yeah, I think the other I think the other part of that, too, the and again, I don’t, I’m not a construction person. But I think the other part of that is, if you look particularly at suburban households, we’ve talked a little bit about households, but suburban households, much more likely to be
Steve H. Murdock 28:16
married couples with children then is true in large urban areas where you have lots of singles, you have older persons, etc. And I think what you see is not only the desire to, to spend less on housing, but also to have that housing that has the land with it for your kids to, to play out in the backyard, etc, which isn’t necessarily provided by an urban condo. And I live in one. So I’m not meaning to be critical. Right. But I simply say, simply saying that, that I think there are factors that are pretty part and parcel of family life in America that that favor suburban living, obviously, you know, substantial increases in the cost of fuel and so forth. might might get people to rethink that. But I think there’s it’s, it’s it’s economic plus other factors that are are creating, creating this growth that the phenomena that happened, that is yet another aspect of distribution is that we clearly seen many, many rural areas in the United States suffering this last decade, meaning continued population loss. So if you go through the the Great Plains, United States, really from the Canadian border down through the Texas Panhandle, or you go over in the Midwest, see a number of states that have had lots of declining counties. So lots of rural areas have continued to decline both as a result of natural decrease that is more people dying and being born, but also because it continued migration to suburban and metropolitan areas.
Jason Hartman 29:49
Right. And you know, speaking of suburbia there, there’s an old saying in real estate that people drive until they qualify. As they qualify, right,
Steve H. Murdock 30:02
yes, yes. Well, I think, you know, we’ve we’ve been looking at some of the growth in in, in Texas counties in the hobby Center here at Rice. And one of the things that is clear is that, you know, the suburbanization has gone farther and farther out, as that drive, in terms paid for you to qualify is paid for you to drive in order to qualify. And so, you know, as you as you look at cities across the country, that is that has been a pattern. And again, yes, massive changes in, in oil prices and so forth may impact that. But, you know, what we can say is to date and through this decade, suburbanization still had a pretty, pretty good hold on America,
Jason Hartman 30:46
let me ask you about household makeup for a moment, and then try and wrap up here, I heard that in the last few presidential elections, many people didn’t really realize what the largest voting bloc was, a lot of times you hear these reports, they try to divide up the voting box by age or ethnicity, or they talk about the AARP or trade groups or unions or whatever. But actually, what I had read a couple of places, and also heard is that the largest voting bloc in the last few presidential elections was singles, because people are waiting so long, or divorcing, or whatever. And nobody really sort of viewed that as a voting bloc or constituency, the same way they view these other groups.
Steve H. Murdock 31:28
Well, we’ve got a number of things, of course, going on, we have the oldest age at first marriage in since the 1930s. And so many, many young adults are being single until the latter part of their 20s. And this is this is a new phenomena, we have a fairly high divorce rate, we have also people who are living longer, but that because of the differential that exists between males and females, which is still there, women live longer than men. And so longevity. Still, although men have done better in the last decade or so than they did two or three decades ago, we’re still seeing a growing number of widows out there who outlive men. So we have a number of factors that are going together to decrease household size. And to diversify the form of households that we have out there. We have more single parents, we have more diverse household compositions, then than anytime, at least in recent history. So you know, households have become very important patterns, not only politically, but certainly for the private sector in terms of marketing. And all you have to do is watch television see the number of things where convenience is the major factor being stressed in terms of a food product is being provided, and it gets something quick and get something that that, you know, the it’s appropriate for someone who, who is a single person. So they’ve certainly been impacted by lots of things as well.
Jason Hartman 33:11
One of the things that I was talking to my mother about this just yesterday, actually is I recently purchased a small apartment complex in Scottsdale, Arizona. And if she asked me what the unit mix was she being in real estate as well. And she said, you know, what’s the mix of units? And I said, they’re all one bedrooms? And and she said, Well, I don’t know if that’s so good, because you’ll get that transient tenant. And I said, that was true 2025 years ago, but nowadays, the one bedrooms actually do are I mean, can do all other things being equal quite well. And that’s why I was kind of leading that into my question on the singles as being such a large demographic cohort. So it’s, it’s really different than it used to be. I mean, one bedrooms used to be a bunch of like transients, that wouldn’t stay in your property very long. And you couldn’t find a renter for a one bedroom. But that’s really changed nowadays hasn’t Yeah,
Steve H. Murdock 34:03
well, composition, certainly household size has gone down. And as I said, the diversity of household forms, you know, the married couple with two children, one male, one female than male, preferably two years older than the female, which is kind of the stereotypical 1950s or 60s, probably 60, or 70. Now, because we used to think of four children, those are increasingly, you know, decreasing proportion of the total. And so we have just a variety of possible groups out there that that, as you say, are driving a variety of housing choices. And so, you know, that’s certainly a factor that I think is is is is critical. I think overlying this, although I’m not an economist, I think is the is to see where we’re going economically in terms of recovery, those sorts of things are going to affect not only economic, but they’re going to affect demographic factors going forward. Yeah,
Jason Hartman 34:56
yeah, no question about it. Well, I know we need to, we need to wrap up here and let you go. But I want to just ask you one more thing and talk about Gen Y for a moment, Gen Y is such a large demographic cohort, and they are moving into their prime household formation years and their prime renting years. And in terms of the housing market, I guess the one thing about Gen Y, that doesn’t bode well for landlords, real estate investors is that they like their parents, and they tend to stay living there a long time.
Steve H. Murdock 35:25
Well, yeah, you know, I sometimes kiddingly say, in my presentations, that we’re looking at the baby boom generation, and we’re looking at the numbers that will be and, and, you know, these, these, this number will be hopefully there will be, you know, elderly people without children, meaning without children living with them, right. But But, you know, I think we’re yet to really know, and I’m, and I’m not an expert in this area. So there may be people who do know, but I think to see how these household forms will play out, because there is deep rooted, I think, in American culture and American society, the idea of, you know, bonding together of pairs, which, and which leads to offspring, or at least can. And so it’ll be interesting to see, if we really do get generations were intentionally and up with what appears to be possible very large proportions of persons who, who never have any children, that would be quite different than anything in the history of the US and quite different, I think, than we see ourselves socially. And culturally, I think it’s a it’s a, you know, there’s certainly lots of economics, that would support that is not not being an illogical set of circumstances, you know, you talked about about real estate, again, I’m not a real estate expert, but a friend of mine who does a lot of work in this area. And I don’t know whether he’s right or not, but he said he believes there’s segments now of American society in which people are beginning to look at housing more like they look at automobiles, as something that you purchased, used, sold, when you sold it, you got as much out of it as you could, but you didn’t see it as much of an investment, as maybe your parents did. And if that shifts, that would be a major shift in the way that all of us have, have looked at at real estate, and certainly the bubble that we’ve had, and, in fact, that continues to be bothersome to our economy, if we start looking at housing in the way that he’s suggesting it would be a very different real estate market and real estate reality, if you will. I think
Jason Hartman 37:42
for many reasons, we are going to see the homeownership rate continue to decline pretty dramatically. And that is why the apartment developers are really, really looking at an incredible slew of demographic good news for them as the renter market increases. And I think you’re right, I think we’re going to see many, many millions of new renters enter the market, many reasons Fannie Mae and Freddie Mac possibly going away. So financing being even tougher to get than it is now, people that have destroyed their credit the last few years and letting their houses go, they’re going to be renting and then Gen Y moving into their prime renting yours and staying single longer, you know, if you’re married, you’re more likely to buy and own if you’re single, you’re more likely to rent. And that’s just my anecdotal interpretation. Yeah,
Steve H. Murdock 38:27
there’s better people than me, at least to talk about this. But I think I do think that we’ve got the patterns and trends that may be, you know, we may have had a period here, because of the economics of it to that will, they will substantially change our view on housing, in our view on housing composition going forward. I think it’s just, I was, I’m one of those people who, who owns a house in another city, that he goes in Libya.
Jason Hartman 38:56
I own many of those.
Steve H. Murdock 38:59
And, you know, I can say that my my grandson says, Well, why didn’t you do that? You know, why, why didn’t you just rent? And, you know, my explanation seems to him kind of quaint, you know, used to be a good idea to buy. And, and He kind of looks at me, like goodness, hold on ideas that not realizing it’s not all that old, you know, five, just years ago, you’d have been being told that still, I think, and so. So it could be a substantial shift, going forward. But now that’s what makes the demographic so exciting. And when we look at it in place here like Texas at Rice University and our hobby center, one of the things that we we find exciting is seeing how it changes out changes by geography, how it changes by area, how it changes for population groups. And one of the things that we spent a lot of time looking at is the need to ensure through education, other factors that these rapidly growing components of our population are competitive as we go forward in time because In a very real sense, as we look at America today, the future of America and the future of fish like Texas and California is in increasingly tied to their minority populations. And in very real sense how well they do is how well the US is going to do in the future.
Jason Hartman 40:16
Yeah, very good point. Well, Steve Murdoch, thank you so much about your website, if you would, and and tell us a little bit about your books, too.
Steve H. Murdock 40:23
Okay. Well, our website, you just go HTTP hobby [email protected]. And you can get the data not only protects us, but for the US on our website, learn about our center, which is looking at the issues not only for Texas, but across the country. We will be with some support from from the metals Foundation, we are redoing two works that have been we think consequential, both nationally and in the state of Texas. One of those is the America challenge, which is a work that looks at the demographic implications of the socio economic implications, really a demographic change, the similar one that that has done that for Texas, both of them looking, for example, at what does it mean for education for for the state and the education in the country? What does it mean to have the changing racial ethnic composition? What does it mean to have the changing age composition that we have as we go forward in time, really, what does it mean, for example, that our population is going to have one in five Americans it’s 65 years of age or older by about 2030. What does that mean, not only in Social Security, those kinds of issues that we’ve heard a lot about, what’s it mean? I mean, in terms of markets, what’s it mean mean in terms of tax revenues? What’s it mean in terms of consumer expenditures across the country in and in states like Texas?
Jason Hartman 41:43
Excellent, very good points. Well, Steve Murdoch Rice University, thank you so much for your insights today. Really appreciate hearing about
Steve H. Murdock 41:49
Thank you. Appreciate the joy talking to you.
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