“Surban” communities—suburban neighborhoods offering the most desired features of urban and suburban living—will attract the most households in the United States over the next ten years, according to a new ULI report, Demographic Strategies for Real Estate. Many people will choose to rent rather than own homes, pushing up demand for single-family rentals.

Despite the continued revival of urban downtowns, the suburbs will draw at least 80 percent of the coming wave of new households as younger families seek urban amenities combined with more kid-friendly housing and good schools typically associated with the suburbs, says the report, prepared for ULI’s Terwilliger Center for Housing by John Burns Real Estate Consulting (which coined the term surban).

It groups the U.S. population by decade born, rather than by generation, to draw conclusions about behaviors shaping trends, with the most influential (and largest) groups being the following:

  • Innovators, born 1950–1959, who led a technology revolution;
  • Equalers, born 1960–1969, who achieved more equality between women and men in the workplace;
  • Balancers, born 1970–1979, who led a shift toward a better work/life balance;
  • Sharers, born 1980–1989, who led the transition to the sharing economy;
  • Connectors, born 1990–1999, who led 24/7 wireless connectivity; and
  • Globals, born 2000–2009, who effortlessly think and interact globally.

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The following are among the trends shaped by these groups:

Surban developments will replace shopping centers. More retail stores will be transformed into places that sell experiences rather than goods, and more development will combine housing and retail to satisfy consumer demand for places that offer convenient, car-free shopping. An 86 percent surge in household formations in the coming decade will drive retail activity—particularly purchases by renters, who will represent 58 percent of the net new households.

Suburban office demand will return. As Sharers move into more-senior management roles and start families, many will move from urban cores to the suburbs to live in areas with good schools, but which are also near employment hubs and entertainment and recreational amenities. They will be willing to share space and work remotely. Women earned more than half of the college degrees obtained by Sharers; as a result, female executives will play a stronger role in office space selection.

Housing rental rates will surge over the long term. The sharing economy’s de-emphasis on ownership will be reflected in soaring demand for rental units. Well over half of the 12.5 million net new households created over the next decade will rent, including those who have never owned, and those making the switch from owning to renting as they age. Homeownership will decline, with the national rate anticipated to be 60.8 percent by 2025—the lowest point since the 1950s. As more Innovators join the already large number of retirees, competition for workers will push up wages, contributing to a favorable environment for rent increases.

Southern suburban migration to continue. The southern regions where 42 percent of Americans currently live will see 62 percent of the household growth in the United States over the next decade. Demand will continue to rise for affordable rental housing, townhomes, and small-lot detached housing, as Connectors join Sharers in raising families.

Municipalities will take a stronger role in encouraging successful growth. Local government redevelopment investments have revitalized urban and suburban areas, and the most astute suburban—or surban—municipal leaders will continue changing zoning regulations to encourage mixed-use, pedestrian-friendly development that accommodates the preferences and needs of new households.

The report points to four demographic drivers with significant potential to create opportunities for real estate professionals:

The continued rise of working women. Women now earn 58 percent of all college degrees in the United States, and they earn more than their spouses 38 percent of the time. By 2025, the number of women in the workforce will rise to 78 million—8 million above the level seen in 2015.

A rising number of affluent immigrants. Immigration will account for more than half the U.S. population growth by 2025. Contrary to some perceptions, many immigrants coming to the United States are highly educated middle- and upper-class families with substantial purchasing power.

The graying of America. By 2025, 66 million Americans will be over age 65—38 percent more than in 2015—as Innovators grow older. This will create lucrative opportunities for customer segmentation, given the widely varied needs and lifestyles of younger retirees versus older ones.

Young adults driving household formation. Connectors will lead the majority of new household growth over the next decade, despite forming households more slowly than their predecessors. They are expected to create 14 million households by 2025, along with Globals, who are expected to create nearly 6 million households; and Sharers, who are expected to create more than 4 million households.

Findings in Demographic Strategies for Real Estate are taken from a book written by John Burns Consulting, Big Shifts Ahead: Demographic Clarity for Businesses.

Trish Riggs is ULI senior vice president of communications.