Americans Hit the Brakes on Driving—and It Could Shift the Housing Market in Reverse

The same generational shifts reshaping the housing market are changing something even more foundational to American life: driving.

It’s well known that younger adults are delaying homeownership under intense affordability pressure. What’s less discussed is that they’re also delaying car ownership and driving less overall. Meanwhile, as more Americans age in place, a growing number of older adults are expected to age out of driving, raising urgent questions about mobility and independence.

That quiet retreat from the driver’s seat could have major consequences for the future of housing. Even as demand grows for neighborhoods where daily life can be lived on foot or by transit, most new homes are still being built for a lifestyle that assumes a car is not only desirable, but also required.

The driving decline: What’s changing and why

It was once a widely held belief in urban planning circles that traffic would always grow. But already, the data is suggesting otherwise.

Vehicle miles traveled per capita have declined 2.3% since 2019, according to data from the Federal Highway Administration. And today, the average American drives nearly 5% less than they did two decades ago—proof that the slow fade of car dependency was already underway even before the COVID-19 pandemic rewired daily routines.

The trend is especially sharp among younger adults. From 2001 to 2017, vehicle travel among this group dropped 19%, nearly double the decline seen in their older peers. From 2017 to 2022, the shift accelerated even more dramatically: Daily trips among young adults fell nearly 50%, according to research from UCLA.

And while turning 16 used to be synonymous with a trip to the DMV, it no longer is today. Only 1 in 25 licensed drivers is 19 or younger, a marked decline from a decade ago, according to data from the Department of Transportation.

Online shopping, remote work, and the rise of streaming services are all seen as playing a role in these trends. People are just leaving the house less. And to be fair, that trend has hit public transit ridership as well: Nationwide, the number of public transit trips declined by 23% since 2019, according to federal data.

But public transit seems to be making a stronger comeback than driving. A 2025 report from the Federal Transit Administration found that ridership grew more than 17% from 2022 to 2023 alone. So, although people may be traveling less overall, the desire for transit access is clear.

The mismatch: Where housing is being built vs. where the need is

Fewer willing drivers introduces a huge question for the housing market: Where will these nondrivers live? Transit-oriented development (TOD) is one solution. 

TOD is almost exactly what it sounds like: housing and land use designed around transit, to create compact, walkable communities where people can get around without relying on a car.

It’s gained traction in planning circles in recent decades as congestion and traffic headaches have pushed Americans to rethink car-first growth. Plus, a growing body of research suggests TOD can strengthen local economies by increasing foot traffic to nearby businesses.

But even as TOD gains more funding and policy focus, the actual housing supply near transit lags dramatically behind. In fact, over the past two decades, nearly nine times as many housing units were built far from transit stations as were built near them, according to a comprehensive Urban Institute analysis.

Historically, neighborhoods surrounding transit stations have grown more slowly than other parts of their cities. The trend was especially pronounced around stations opened in the mid-20th century.

“Neighborhoods near stations that opened in the 1960s, 1970s, and 1980s had a lower rate of housing growth than other parts of their respective urban areas during the 10 or 20 years following station openings,” the report notes.

That pattern shifted in the past 25 years, though. Neighborhoods near transit stations that opened from 2000 to 2009 saw housing growth that outpaced similar neighborhoods without transit by about 8% by 2019.

But even this improvement hasn’t kept pace with the overall population and housing demand. From 2000 to 2019, urban areas with transit stations added just 2 million units, while areas without stations added 17.6 million—a staggering disparity. 

The result is a housing landscape where most new supply is built in car-dependent areas, reinforcing the need for personal vehicle ownership and its associated costs. 

And as in any constrained market, scarcity drives up prices.

“Traditionally, walkable neighborhoods with transit access have been extremely valuable and sought after,” explains Jake Krimmel, senior economist at Realtor.com. “They're close to both work and play, and they're exceedingly rare.”

“COVID kind of broke this rule because being close to work and restaurants/bars became somewhat irrelevant. It became all about space,” he explains. However, “in recent years, with the world returning to normal, the pendulum is swinging back in some metro areas with house prices increasing in prized downtown neighborhoods even as prices at the metro level might be struggling.”

Those dynamics are clearly visible in two historically car-centric cities that have invested in transit.

In Phoenix, where walkability and transit have long been limited, price growth in the city’s most transit-connected ZIP codes has outpaced the citywide average. In two neighborhoods along the city’s 35-mile light-rail line that was first completed in 2008, home prices rose by 194% and 208% from 2019 to 2025, compared to 159% across Phoenix overall, according to data from Realtor.com.

Austin shows a similar pattern. In the neighborhood near UT Austin, which benefits from high walkability and transit access, prices rose 168%—well above the 135% average across the metro. More tellingly, this neighborhood bucked the recent downturn. From 2022 to 2025, while Austin’s median home price declined by 10%, prices there grew 26%.

Where cities do manage to build housing near transit, demand is strong—and prices reflect it. But until more homes are added in these areas, walkable, transit-connected living will remain a premium experience, not a common one.

Why it’s so hard to build near transit

There’s clear demand. There’s a proven price premium. So why isn’t more transit-oriented housing getting built?

The biggest blockers (and they’re familiar to anyone who has followed the housing shortage) are land and zoning restrictions. Transit-rich neighborhoods often have entrenched land uses and strict zoning that limit density, effectively barring transit-oriented housing at scale. 

But some cities, like Austin, are finding ways around these constraints. As the city sought to expand its mass transit corridor, it worked to build housing along with it.

“In my view, you can't have real affordability without having good transportation options,” Austin Mayor Kirk Watson said at the 2025 Let America Build panel at SXSW. “So, as part of the corridor on [Austin’s light] rail line, we have passed zoning changes related to transit-oriented development that will bring about those kinds of changes.”

“While we understand and have suffered from some of the issues with regard to a lack of supply and making it harder for people to build, we have taken significant action in the past two years in order to fix that,” he added.

It’s a potent lesson for other cities trying to bring down housing costs: Building near transit must be part of the affordability strategy, especially as younger generations priced out of the housing market are also less likely to drive.

With the average cost of owning a car now topping $12,000 a year—up from about $8,000 a decade ago, according to the American Automobile Association—transit-oriented development increasingly functions as a financial pressure valve. When households can live without a car, or reduce from multiple vehicles to one, the savings can be substantial enough to ease the affordability squeeze.

An unlikely driver of transit-oriented housing needs: Aging populations

There’s one more reason transit-oriented housing stands to be a critical investment in the decades ahead: America’s aging population.

An overwhelming majority of retirees are opting to age in place. But advanced age can complicate driving, and for many, it eventually becomes difficult or impossible to do safely. That can greatly limit access to services and social relationships and put undue strain on caretakers.

In 2009, family caregivers arranged or gave an estimated 1.4 billion rides to older adults, according to a study by the National Aging and Disability Transportation Center. But that informal safety net has limits, especially for those who need frequent trips to medical care or who live far from relatives.

But easy access to public transit can offset some of those pressures, according to a study on the impact of aging in place near public transit from the Canadian government.

“Understanding and improving public transportation for older adults is crucial because it has a direct impact on their quality of life and on their independence,” explains Merrina Zhang, senior research engineer at the National Research Council of Canada's Automotive and Surface Transportation Research Centre.

“When we invest in making transit systems more accessible and inclusive, we support the well-being of our aging population and improve our understanding of how transit can be made more efficient to meet a variety of needs,” adds Zhang, an author of the study.

But right now, that access is often out of reach for most Americans.

Nearly 58% of older adults live in neighborhoods with no public transit stops, according to research published in the Journal of Transport & Health. Among older nondrivers, more than 1 in 4 use public transit, and nearly 17% use it frequently.

That usage is strongly linked to neighborhood design: In areas with greater walkability and denser transit stop coverage, older adults were far more likely to ride—particularly those transitioning away from driving.

In other words, if cities don’t plan for it now, they risk leaving millions of aging residents stranded in neighborhoods designed for drivers, not seniors. At the same time, they risk compounding an affordability crisis for an already cash-strapped younger generation. Transit-oriented development, then, isn’t just a climate solution; it becomes a way for cities to preserve affordability and independence for all.