Prior to the pandemic, Baby Boomers — typically classified as people born between 1946 and 1964 — represented 41% of homeowners in the U.S, according to a special report from the Research Institute for Housing America.
That number promises to shift in the next few decades, as older Americans age out of their homes to move to assisted living or smaller rentals apartments and, ultimately, die. Experts are calling this phenomenon, which could lead to an influx of 25% of owner-occupied homes going up for sale by 2040, the “Silver Tsunami.”
In 2019, there were 4.4 million single-family homes for sale by older homeowners. The report also uncovered other interesting statistics from that year:
- 2.6 million Americans aged 50+ died
- 1.6 million of those owned their homes
- 500,000 of those homeowners transferred ownership to the surviving spouse
As a result of this, 1.1 million homes were on the market as a result of “the mortality of older Americans,” the report stated.
As U.S. demographics change, the housing market is likely to shift with it. Experts predict that there will be a surplus of roughly 250,000 homes on the market annually, which can lead to depressed home prices and reduced new construction. By 2023, the report said, the surplus of homes will shift favorably to meet demand. Some owner-occupied homes will be converted to rental housing, and more millennials will embrace homeownership, helping to close the gap between supply and demand. Meanwhile, new construction will slow as the demand for housing will not be as high as it has been in recent years.
Noting that supply and demand shifts based on changing demographics are typically “slow moving and highly predictable,” the report said, “Most of the adjustment to aging and mortality will be through a reduction in the growth of new housing and some softness in the rental market.”