Opinion: The next big real-estate boom: Homes for people living alone

By: Joseph Coughlin, MarketWatch, August 6, 2025

Investment strategists often hurry to model interest-rate changes and evaluate the effects of geopolitical upheaval, inflation or the latest breakthrough in artificial intelligence. These developments move quickly and demand attention.

However, not everything that influences markets makes the headlines or is incorporated into investment models. Some of the most transformative forces are slow-moving and quiet, shaping the investment landscape beneath our feet.

One of those forces is the global rise in single-person households.

The one-person household is not just a lifestyle shift; it is a macroeconomic transformation hiding in plain sight. It reshapes consumption patterns and demands a rethinking of the infrastructure we invest in. Real estate is one of the most immediately affected asset classes.

A quiet demographic shift

In 1940, only 7.7% of U.S. households were single-person. By 2023, that figure rose to nearly 30%, according to the U.S. Census Bureau. In cities like Washington, San Francisco and New York, living alone is quickly becoming the most common household type.

The U.S. is not unique. Over the past 35 years, the number of Canadians living alone has more than doubled. Across continents, one-person households are becoming increasingly common, with many cities where they now make up the majority.

The change is especially noticeable in parts of Europe. Countries like Sweden, Norway, Finland and Germany report that more than 40% of households are composed of a single person. In large metropolitan areas like Tokyo, Stockholm and Paris, solo households are nearing 50% of all living arrangements.

Even in fast-urbanizing economies such as China, the number of solo households is rising rapidly, driven by rural-to-urban migration, delayed marriage and low birthrates.

Yet much of the real-estate ecosystem — from investment models to product design to development — remains rooted in an outdated consumer unit: the two-person-plus-children family household. It’s time to adjust the models, recognize new demands and realize growing market opportunities.

The misfit suburban model

The conventional housing market remains heavily skewed toward large, multibedroom homes in family-centric suburbs. After a short period of decline in the average size of new homes, the National Association of Home Builders recently reported an uptick, with the average size now at about 2,400 square feet.

But for solo dwellers, these homes are often too large, too expensive and not aligned with their needs. Community factors, such as a good school district or nearby playground, no longer hold the same importance they once did. As adults of all ages choose to live alone or find themselves doing so, the demand is increasing for smaller, well-located, low-maintenance homes.

Solo homeowners often face a premium: They must shoulder the full financial and labor costs of utilities, property taxes and maintenance. This higher per-capita cost of living is compounded when appropriate housing is limited or entirely unavailable, resulting in what might be described as a hidden solo’s tax.

For developers and investors, the opportunity is to build more, but for one. The market is growing. Consider just a few of the vast tributaries feeding the increasing flow of solo real-estate consumers: never-married or partnered individuals, widows and widowers, midlife divorcees seeking independence, and young millennials and Generation Z priced out of city centers but uninterested in sharing a home.

The rise of amenity-rich rentals

Not all solo dwellers want to own. Many are drivers of a growing new rental class — one that demands high-quality experiences, services and community-by-design. Delivering on property experience or being located in a high-density, amenity-rich neighborhood is the critical value-added infrastructure in a solo-living marketplace.

In metropolitan markets, amenity-rich rental buildings have evolved from luxury to necessity for solo tenants. These renters are not simply seeking a place to live; they want safety and access to outdoor facilities, social opportunities and quality services. Fitness centers, co-working lounges, concierge services and even in-building pet care were once considered perks. Now, they have become baseline expectations.

Why? Because when you live alone, your home becomes your main place for safety, productivity and social connection. In a family household, responsibilities and roles are shared. For solo renters, the home is more than just a place to live; it serves as a hub for connection, convenience and self-care.

From an investment lens, these amenity-rich models offer premium yields, particularly in high-density urban markets and a growing number of suburban areas that offer what might be described as urban-lite living — featuring walkability, entertainment, restaurants and shopping.

Solo aging as a senior-housing tailwind

Perhaps nowhere is the rise of solo living more consequential than in senior housing.

For decades, senior living communities were often imagined through the lens of couples, particularly in the active-adult housing segment: retirees aging together, downsizing from a family home and arriving as a pair.

That model still persists in floor plans, pricing structures and marketing images. But demographic reality is rapidly diverging. Today, the typical resident entering senior housing is not necessarily part of a couple, but rather a single older adult, most often a woman, often arriving alone.

And here’s the shift: The growing population of solo agers is likely to expand the market for senior housing. That is, if senior-housing investors and operators recognize and respond to solo aging consumer.

As more older adults live without spouses, partners or nearby family, their options become limited. People who live alone are likely to be more aware than couples who share household responsibilities of what it takes to maintain a home and care for themselves. Aging in place, once considered the gold standard of independence, becomes physically, logistically and emotionally more difficult when you live alone. The casual support that a spouse or adult child might provide — such as helping with a doctor’s appointment, noticing a health change or calling a plumber — is absent. What used to be quietly managed within the household now must be outsourced, scheduled and paid for.

In this context, senior housing becomes a logical choice, not the least-best option. Not just for care, but for companionship. Not just for support, but for services.

Communities that offer built-in social interaction, 24/7 staff presence, transportation, dining and access to care represent more than real estate: They are infrastructure for living safely and well while alone. The very characteristics that may have once made older solo adults hesitant to move, like a fear of giving up independence and stigma around assisted living, are likely to give way to a more pragmatic view.

Increasingly, solo agers will reframe senior living not as a last resort, but as the next logical, proactive and aspirational step for someone who has had to make a lifetime of such decisions on their own.

From an investment perspective, this lifestyle shift shows promise. The trend of solo households may extend the demand window and lower the average age of entry into senior housing, as more younger solo agers clearly recognize the challenges of aging alone. Operators who design for individuals, foster connections and market toward independence with aspirational experiences will be well positioned to serve this important demographic.

Betting big on small

Unlike market volatility, ever-changing geopolitics and mapping where technology will lead, the solo-living trend is not speculative. It is observable, measurable and global. And yet, it remains underrepresented in real-estate investment and development strategy.

Home developers are overbuilding the large and underbuilding the small. In rental housing, we are still treating amenities as luxuries rather than essential infrastructure for a household of one. In senior housing, we are preparing for older people with needs, rather than for a new, younger, single consumer with wants.

The solution is not to overcorrect, but to rebalance toward flexible, adaptable and solo-conscious product design and development across real-estate asset classes. Invest and build for one, and you’ll serve many.

Source: Joseph Coughlin, MarketWatch, August 6, 2025

Joseph Coughlin, PhD, leads the Massachusetts Institute of Technology AgeLab. Coughlin examines the market and societal implications of demographic change, consumer behavior, and technology trends. He is the author of “The Longevity Economy: Unlocking The World’s Fastest-Growing, Most Misunderstood Market,” his latest book is “Longevity Hubs: Regional Innovation for Global Aging,” with MIT AgeLab colleague Luke Yoquinto.