Housing

The county's population is growing. Chester County, with a 2022 estimated population of 545,823 people, is projected to be the fastest growing county in southeastern PA, with a projected 99,850 residents to be added by 2050.

• The County will need additional new homes. An increase in units will be needed to accommodate the projected growth. Based on the current projected population growth and household size, an approximate 51,000 new homes will be needed by 2050.

Life expectancy has increased, and people are living longer, with baby boomers aging into becoming seniors. With medical advances and other improvements in quality of life, US life expectancy has grown from 70.1 in 1960 to 76.1 years in 2021¹. The population of those aged 65 and over is steadily increasing in Chester County. In 1950 there were 21,557 residents aged 55 and older, this number increased to 87,168 in 2020 and is projected to increase to 145,040 in 2050.

• Lack of housing turnover leading to fewer middle-priced units. Up to 92% of seniors choose to age-in-place², meaning they remain living in their current residence as they age. With increased life expectancy, the rate of turnover has slowed. As traditionally turnover of houses from seniors has been a source of attainable priced housing, this trend is causing a decrease in homes for sale at attainable prices.
• The demand for additional low maintenance, lower cost homes is increasing — including age restricted housing. Seniors have lower income as they are often on fixed retirement and may need lower maintenance housing as their physical abilities decrease. The majority of seniors will choose to age in place, necessitating potential adaptability changes to existing homes. While the amount of age-restricted housing has been increasing, additional units will be needed to meet future demand.
• Increase in multigenerational households. While seniors live longer, their care needs often increase as they age, leading them to move in with family members. This has contributed to an increase in multigenerational households. From 1971 to 2021 the number of multigenerational households more than doubled, from 7% to 18%³.

Younger generations, who have been choosing to delay or forgo marriage and/or children, are increasingly aging into these life milestones. Gen Z and Millennials have been completing major life milestones later than their Gen X and Boomer counterparts. The mean age for motherhood at time of first birth has been increasing, up to 30 in 2022, demonstrating a delay in parenthood. Up to 44% of childless parents aged 18 to 49 state it is "not to likely" or "not likely at all" that they will have children; an increase of 7% from 2018,⁴ indicating an increase in those choosing to remain childless. The share of young adults heading households decreased by 3.6% from 2000 (49.2%) to 2016(45.6%).⁵

• Renting is more common. Homebuying traditionally often accompanies major life changes such as marriage or divorce. In 2023, 70% of successful homebuyers were married, and only 15% were never married. As younger generations continue to postpone or forgo marriage and children, renting may become increasingly popular.
• One- and two-family households are becoming more prevalent. "Nuclear families," defined as two parent households with children, traditionally comprised a large sector of the population. At a national level, demographics are shifting away from nuclear families. While nuclear families accounted for 43% of all households nation-wide in 1950, that percentage decreased to just 20% of households in 2015. Pennsylvania and Chester County have both seen similar demographic changes.
• Potential for new household formation and homeownership. For the members of the younger generations who only delayed marriage and children, there remains potential for additional household formation. If millennials were to form households at the same rate as Gen X and Boomers did (at ages 26 to 41) there remains the potential for two million new households to form in the U.S in the next few years⁶. Economic conditions support this, as millennials recently became the highest earning generation. While previously many millennials could not afford to purchase homes, they now have higher spending power, making both homebuying and children more feasible. In 2023 millennials were the highest percent of successful buyers, at 37%⁷. This may be leading to an increase in demand for homeownership housing, especially for single-family larger homes with yards that can accommodate families and may result in increased migration to the suburbs out of the city.

Rising mortgage rates. Mortgage rates reached a low of 2.65% in 2021, leading many homeowners to refinance their existing mortgages⁸. Later, when mortgage rates rose to highs of 7.49% in 2023 (the highest since December 2000)⁹ many potential sellers chose to wait to sell homes due to recently refinancing with lower mortgage rates , and potential buyers chose to wait to purchase a home in hopes mortgage rates would later drop. Mortgage rates remained high from 2023-2025, with a low of 6% in September 2024, and in early February 2025 were again below 7%¹⁰.

• Lower housing turnover and higher priced homes. After refinancing or purchasing their home at lower rates, many homeowners are choosing to remain in their current homes instead of selling. This is causing a decline in for-sale stock, which is contributing to the current high sales prices. Existing home stock decreased by 15.3% from August 2022 to 2023¹¹.
• Longer house searching times. The majority (58%) of prospective homebuyers stated they had been searching for at least six months. Of those prospective homebuyers, 49% stated they were waiting for market conditions to become more favorable¹².
• Homeowners choosing to invest in their current homes. The home improvement market has been growing, up 7% in 2022 from 2021¹³.
• Builder confidence down for single-family new homes¹⁴. Builders have seen decreased traffic as potential buyers are priced out of the market. This is causing decreased land deals, single-family new homes starts, with builders shifting to building fewer, higher cost homes.
• Decreased new home costs. Some builders are cutting sales prices for new homes to remain competitive in the high interest market¹⁵. Additionally, there are potential signs of increased new home starts as the tight supply has outpaced the decrease in demand¹⁶.
• Slowing down of rent price growth. Where previously rent price growth had been strong, it has slowed due to high inflation as people choose to renew their leases over moving¹⁷. However, rent growth may rise again as the shortage of housing supply may push some landlords to sell their buildings instead of continuing to rent them out, leading to a shortage of rental supply.
• Increased cash offers. High interest rates are giving an advantage to cash buyers, who are not impacted by interest rates¹⁸. In 2023 69% said they intend to finance with a mortgage, 31% in cash¹⁹.
• Prioritization of rental units. Builders have continued to build rental units, as potential buyers who are unable to afford home purchases continue to rent²⁰.

Many people, especially in younger generations, are experiencing increasing living costs and decreasing incomes. Upward mobility in the US has declined, with Gen Z and millennials no longer making more than their parents and often making less²¹. Real wages have largely stagnated over the past 60 years²². Younger generations are more likely to have student loan debt²³.

• Increase in renting. Households are increasingly renting as they are becoming more mobile and have less capital. With employment becoming less stable, households are more wary of investing in long-term housing, preferring instead the flexibility of renting. Additionally, as incomes have not kept pace with home cost, many households are unable to afford to buy homes, especially the younger generations. Millennials have been lagging Gen X and Boomers in homeownership. On a national level, substantially fewer millennials are homeowners today than Gen X and baby boomers were at the same age.
• Increased multigenerational households. Raising housing prices and decreased economic stability have led to an increase in younger generations living with their parents. The number of multigenerational households is about four times greater than in 1970. Up to a share of 18% in 2021²⁴.

Buyers are increasingly prioritizing and viewing housing as an equity investment. Potential buyers are increasingly prioritizing potential equity gain in their housing purchases²⁵. The availability of online information and resources has informed additional people of income generating possibilities of housing and has further globalized residential investment. Home-sharing sites such as Airbnb and VRBO have made it easier to create short-term rentals, and both individuals and firms have converted existing residential units into short-term rentals. Home flipping, the practice of buying and renovating low-cost homes to quickly sell for a profit, has also become more common²⁶. Investment firms have increasingly been competing with individual buyers for housing, owning up to as much as 40% of the nation's single-family housing stock²⁷.

• Tightening of the market and increased housing costs. Airbnb, home flipping, and investment firms have created additional competition for existing housing stock. While 75% of individual buyers continue to buy for primary home use²⁸, short-term rentals and home flipping have increased competition for residential units. The increased competition has led to greater demand than available units, creating a sellers market . The increase in home flipping has reduced available affordable units, both in the short and long term.

The U.S. economy has been expanding but the future remains unclear. Real Gross Domestic Product (GDP), personal consumption expenditures, and investment expenditures increased throughout 2023. Additionally, the U.S. saw job growth in 2023. Unemployment, labor force participation, and the number of unemployed persons has remained steady. With the rising jobs and steady unemployment, there is a high ratio of open jobs to persons looking, providing job seekers with some negotiating power. However, increasing inflation and gas prices in the later part of 2023 has decreased consumer confidence²⁹.

• Supply likely to remain low. As the future of the economy remains unclear and mortgages remain high, many sellers are likely to retain ownership of their homes. This decreases housing turnover, which is a substantial part of housing supply.

Remote work has become more prevalent. In 2023 12.7% of workers employed full-time worked fully remotely, and another 28.2% worked a hybrid schedule³⁰. The number of people working remotely full-time is projected to increase to approximately 22% by 2025³¹.

• Increased demand for the suburbs. The suburbs have always been attractive, but historically many, especially those without children, prioritized proximity to work and amenities such as restaurants and shopping. COVID-19 created some shifts of socializing and leisure activities to inside the home and acclimated many people to ecommerce shopping³². Additionally, remote and hybrid work has enabled people to live further from their employment. Combined, all of these factors have made suburban living both desirable and feasible.
• Additional demand for home offices leading to extra bedrooms. In surveys conducted by Zillow, 64% of respondents stated that they considered an extra room for use as a home office as "extremely important" in their housing decisions³³. During COVID-19 the demand for four bedroom homes increased, up to a 48% market share in 2022, a trend that has since continued³⁴.
• Potential change in demand for cars. With more people working remotely or hybrid, there is a potential for households to downsize their number of cars, instead relying on public transportation and ride-shares. However, as people are able to move farther from their employment they may depend more on cars if they previously relied on walking or public transportation to their employment.
• Prioritization of location amenities and/or cost of living, especially for first-time buyers. As an increased number of homeowners and renters can work remotely, they no longer need to place such a high prioritization on proximity to their employment for their home location decisions. This has caused some migration from urban areas to more rural and suburban areas.
• Desire for more shared community amenities. As people worked from home during COVID-19, many missed the community of the office. Throughout 2019 through 2022, the percentage of potential buyers who stated shared community amenities such as club houses or pools steadily rose, up to 53% in 2022³⁵.
• Increase in one person households. As a result of COVID-19, many people who would have lived with roommates transitioned into living alone³⁶. This was largely due to the increase in remote work, which caused people to value having more space in their homes.
• Increase in home prices. The research shows that areas with greater exposure to remote work saw significantly higher home price growth³⁷.
• Connectivity an important amenity. With the increase in remote work, the need for strong internet connectivity and cellphone service have become essential and in demand³⁸.
• Declining use of office space leading to potential for residential conversions. As offices switch over to fully remote or hybrid work, they may require less space than previously. As they downsize office vacancy is increasing. This is also shown in the data, which shows an increasing vacancy rate for office space in the county. These spaces could be adapted into residential apartments. However, barriers such as high conversion costs still exist.

Activities done in the home expanded. During quarantines in 2020 people began using their homes differently. Activity shifted almost fully to within the house, and many picked up new hobbies or began working from home. While the pandemic quarantines have long-since ended, how homes are used remains changed.

• Separation of spaces. During the pandemic, many designers predicted that households would shift to have more separation as opposed to open floor plans. Despite speculation of an increase in desire for defined spaces, 54% of survey respondents stated they would prefer a contemporary open floor plan, and only 22% stated they preferred a closed floor plan³⁹.
• Increasing home sizes. As people continue to use their homes for an increased amount of activities, they are desiring more space. While the average size of new single-family homes had been decreasing from 2014 through 2020, both 2021 and 2022 saw increases in average new single-family home size⁴⁰.
• Desire for outdoor space. During COVID-19 the demand for outdoor amenities increased as people began to socialize outdoors to decrease exposure. Post COVID-19 people have continued to desire additional outdoor amenities.

Health has become more of a priority for homebuyers post COVID-19. The COVID-19 pandemic highlighted the connection to health and public spaces. People began to think differently about the public spaces they inhabit, and began using outdoor spaces more due to social distancing.

• Desire for amenities such as walking trails and connection to outdoors.⁴¹ Walking trails saw increased use during the 2020 COVID-19 pandemic⁴². Demand for outdoor amenities remains high, and amenities such as walking trails have become increasingly popular.

Increasingly connected and technologically savvy population. Technology has enabled greater connection and easier access to information and resources. HGTV, YouTube, and TikTok shaped how people think about housing, especially for the younger generations.

• Buyers increasingly interested in customizing their own homes. The percentage of potential buyers interested in customizing their own homes has been increasing⁴³. Younger generations, especially Gen Z, are particularly interested in making their homes their own. In surveys, respondents stated wanting to customize their home as a prime driver for wanting to buy a home. For Gen Z, there is a greater willingness to purchase fixer-uppers as they have both the drive to customize their own homes, and a confidence to take on projects gained from growing up on HGTV and YouTube how-to videos. There is also a strong demand for new construction homes, as people want to customize their homes without the DIY work.
• >Increase in demand for smart technology. As they become more connected, buyers and renters are increasingly desiring smart features in their homes.
• Potential buyers increasingly finding homes online. Buyers are increasingly purchasing homes online, and for new construction homes buyers are increasingly willing to purchase a home after only viewing it online⁴⁴. This could potentially lead to increased competition for homes in the county.

Location remains the main priority for potential homeowners. Despite major shifts in how people work and live, location remains a top priority for people when buying a home.

• Increase in new construction development in existing neighborhoods. Existing neighborhoods provide a reliable experience for potential homebuyers compared to new development neighborhoods. Over the past few years, the percentage of new construction buyers who purchased in an existing community has steadily increased⁴⁵.

Climate change causing new disasters and challenges. Climate change is one of the most significant environmental challenges of the 21st century. Scientists expect that with the current trends in fossil fuel use, Chester County will see more drought, extreme temperatures, floods, hurricanes, and winter storms, in the future.

• Hotter temperatures mean older homes without AC become more obsolete. Temperatures across the nation are increasing yearly, causing additional problems for residents with older homes with no air conditioning. With Chester County being a historical area, many homes are older, which means more units are without air conditioning. Chester County outlines in its Climate Action Plan an objective to provide resources and financial assistance for seniors and low-income residents with older homes to improve conditions in the home. Municipalities can connect residents with the Low Income Home Energy Assistance (LIHEAP) program and/or organizations who implement financial assistance plans to help residents with older homes install air conditioning units to combat increasing global temperatures.
• The county will see an increasing number of severe weather events and flooding. Flooding has become increasingly common in the county and is expected to continue to grow⁴⁶. Additional storm water management and home waterproofing will be needed. Buy-outs for homes in flood-prone areas may become more common.
• Change of location preferences. In a Zillow study, 85% of prospective buyer respondents in the Northeast stated climate risks as a factor in their home location choice⁴⁷. Floods and extreme temperatures were the most common risk mentioned as a location factor by survey respondents.
• First time buyers more at risk. First time buyers are on average younger and with lower incomes than repeat buyers. In surveys they indicated climate risks had less of an impact on their housing decisions, likely due to their more limited buying power.

People are becoming increasingly aware and concerned about climate change. In surveys, with each subsequent generation people are becoming increasingly aware and concerned about climate change. In surveys completed by Yale University, 62% of Pennsylvania residents reported being somewhat or very worried about global warming⁴⁸. GenZ and Millennials are more likely to support switching away from fossil fuels, are more likely to prioritize climate change action, and more likely to have taken action because of climate change⁴⁹.

• Higher demand for EV charging. People are becoming increasingly supportive of switching from gas-powered vehicles to EVs⁵⁰, and EVs are becoming more common. This may result in increased demand for special charging equipment and garages for single-family attached and detached homes, and for level two charging equipment for multi-family homes⁵¹.
• Desire for more sustainable features in homes. The demand for sustainable features and amenities is increasing for homeowners and renters. These amenities can include energy efficient appliances, cool roofs, high-efficiency windows, insulation, programmable thermostats, radiant floor heating, recycled building materials, solar panels, green roofs, and compost collection service.