What Role do Baby Boomers Play in the Housing Market?
February 23, 2023
America’s baby boomers – more than 71 million people born between 1946 and 1964 – are increasingly becoming a major source of existing homes for sale as they downsize, pass away or transition to other housing options.
Boomer homeowners today own some 32 million properties nationwide, of which 4.4 million annually go on the market. Interestingly, however, according to the Mortgage Bankers Association’s Research Institute for Housing America, this will have minimal effect on housing inventory or pricing over the next decade or so because of the sustained homebuyer demand stemming from general population growth and younger generation households.
For reference, Gen X, born between 1965 and 1980, consists of 65 million people. Millennials – those born between 1981 and 1996, and currently the leading home purchasing generation – are the largest group at 72 million, while Gen Z, the youngest of whom are just now entering the homebuying market, number 67 million.
Listings by senior homeowners are an important source of existing home supply. But today’s housing market, somewhat limited by the twin effects of rising interest rates and prices, is keeping some potential sellers from moving – including a number of younger boomers who do not yet need or want to move. However, industry estimates suggest that a quarter of those owner-occupied homes will come on the market by 2040.
While that is not quite the ‘silver tsunami’ that some industry insiders forecasted just a few years ago, aging and mortality is likely to put for sale signs on some 250,000 units annually as the years go by – a number not likely to have a measurable impact on prices or on the balance of supply and demand.
At the same time, researchers noted, current statistics are based primarily on past behavioral patterns regarding aging and the housing market. People just now aging into the most senior boomer population may have different preferences and available resources than previous groups.
Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.