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Baby Boomers Driving Climb in Affluent Households

The appreciation in home values over the past several years that has helped offset losses in the financial markets has contributed to the factors that are bolstering a steady climb in the nation’s number of affluent households, according to a recent study by the Conference Board.

Home builders can expect to see growing numbers of affluent buyers — defined as households with annual earnings of at least $100,000 — in the marketplace, based on the findings of the Conference Board’s research.

In the next seven years, the ranks of the affluent are projected to grow from today’s 15 million, or 14% of U.S. households, to 20 million, the study says. By 2010, those families will command spending power of more than $3.5 trillion.

“Over the past 20 years, America’s middle and lower-income classes have slowly been working their way into the ranks of the well-to-do,” says Lynn Franco, director of the Conference Board’s Consumer Research Center.

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“As the country steadily moves toward a more top-heavy income society, average household earnings will top $63,500 in 2010, up from $50,000 in 1990.”

The median net worth of the average affluent family increased 69% between 1998 and 2001, according to Federal Reserve Board data, while the average U.S. household’s net worth rose only 10%.

Giving a big boost to affluence are the 78 million post-World War II baby boomers who are now in their peak earning years, the Conference Board notes.

“In fact, older affluent boomer households — headed by those 55-64 — are estimated to increased by more than 60% over the next several years,” the study says. “This older segment will top 4.2 million in 2010, up from less than 2.7 million today, and its spending power will increase from $455 billion to more than $750 billion.”

High-end affluent households with annual incomes exceeding $250,000 are also due for a rapid increase, says Franco, but the members of Generation X following in their footsteps will slow that trend down largely because there are fewer of them.

Assuming that there is steady economic growth, the next big wave of affluence should start growing in 2015, when the 72 million members of Generation Y start moving into their “prime” earning years, the report says.

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More Seniors Data Available in BuilderBooks.com's 'Boomers on the Horizon'

"Boomers on the Horizon: Housing Preferences of the 55+ Market," available through BuilderBooks.com, can help you better build and market homes to the senior housing market. Based on a study conducted by the NAHB Economics Department with funding from the Seniors Housing Council, this book reflects the fact that boomers are on the verge of drastically changing the building industry. To view or order this publication, click here, or call 800-223-2665 to order.

BuilderBooks.com also offers a variety of other publications featuring information about particular markets in the housing industry. To view or purchase these publications online, click here.

Lean more about seniors housing market at 2004 Seniors Housing Symposium

To learn more about the seniors housing market, plan to attend Building for Boomers & Beyond: Seniors Housing Symposium 2004 in Chicago from April 14-16, 2004. The symposium will focus on the lifestyle component of 50+ seniors housing. To learn more, click here.
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