Households and Housing Forecasts at State and Small Area Levels --A New Approach and Applications to the State, Two Counties and One Town of North Carolina

Zhenglian Wang, Duke University
Danan Gu, Duke University
Yi Zeng, Duke University

Employing the ProFamy method/program, this study examines the methodological and empirical issues of households and housing forecasting at state and small area levels with illustrative applications to North Carolina, Orange and Chatham counties, and the town of Chapel Hill. Our forecasts demonstrate that future housing consumption is directly linked with household size/type/income, age/race of the householder, and changes in demographic rates. The results show that there will be a 16-17% and 16-19% increase in owned and rental housing units from 2005 to 2015, respectively. The growth in housing consumption of smaller households, elderly households, low income households, less than 3-bedroom households, and Hispanic households will be faster than that of other household types. Our analysis shows that the headship-rate method may substantially bias the forecasts of owned and rental housing markets due to its inherent deficits of being unlinked to demographic rates and excluding household size and cohort-component effects.