Aging Owners Will Free Up Millions of Homes Over the Next Decade

According to a new Realtor.com report, the generational housing handoff is underway, and over the next decade, Baby Boomers and members of the Silent Generation are expected to release 13.9 million homes.

That’s 34% more than older households did in the last 10 years, according to new Realtor.com research. First-time buyers, however, shouldn’t expect a windfall because almost all of those homes are family-sized or larger, while starter homes make up a small portion.

Baby Boomers were born between 1946 and 1964, following the surge in birth rates after World War II. Members of the Silent Generation were born roughly between 1928 and 1945, between the Greatest Generation and the Baby Boomers.

“The scale of this transition is unlike anything we’ve seen in the past decade, and it’s accelerating every year,” said Jiayi Xu, Senior Economist at Realtor.com. “The question for buyers and sellers isn’t whether more homes are coming, but which homes, where, and how many buyers will be there to meet them.”

A Bigger Handoff Than the Last Decade

This is a milestone year for housing, Realtor.com noted.

That’s because this year, the oldest Baby Boomers are turning 80, and even the youngest members of the Silent Generation are past that mark. That’s important because homeownership among older Americans generally holds steady into the mid-70s, begins to slip in the early 80s, and falls off more sharply in the mid-to-late 80s, Realtor.com noted.

Currently, Realtor.com said that Boomers and the Silent Generation live in an estimated 36.7 million homes they own.

By 2036, Realtor.com said it expects that to drop to 22.8 million, a decline of 13.9 million homes, or about 1.39 million a year. It said that generational handoff, often called the “silver tsunami,” includes homes vacated through death, a move to institutional care, household consolidation, or a move to a rental.

According to Realtor.com, that’s 5.9 million more than the roughly 8 million homes these generations released over the past decade. The pace keeps accelerating, from about 1.27 million homes in 2027 to 1.52 million in 2036.

Realtor.com noted that who’s handing off is changing, too.

It noted that today’s handoff is still driven largely by the Silent Generation, but there are fewer of them left each year. Realtor.com said Boomers are moving in the other direction, and around 2029 they’re expected to overtake the Silent Generation as the biggest source of homes freed up.

They’re still climbing in 2036, which means the real peak likely comes after this forecast ends, Realtor.com noted.

The Handoff Helps, But Doesn’t Eliminate the Housing Gap

While 13.9 million sounds bigger than the nation’s 4 million-home shortage, Realtor.com noted that the two aren’t directly comparable. Homes released by the aging population ease inventory constraints caused by underbuilding and rate lock-in, Realtor.com said, but they don’t arrive all at once.

The entry-level segment is where the shortage is most acute for first-time buyers, and gets the least relief, Realtor.com said.

“The handoff is a welcome relief, but it is not big enough to solve the housing shortage issue alone,” Xu said. “Keeping homeownership within reach for the next generation, and keeping these homes a source of family wealth, will still take more supply, especially homes first-time buyers can afford, particularly in expensive markets.”

What’s the Impact?

The impact of the handoff differs sharply by home type, Realtor.com noted:

Starter homes: Boomers and the Silent Generation own 1.33 million, or 51.3% of starter homes, yet only 0.38 million are expected to be released. With only 38,000 starter homes released annually, just 3.2% of current listings, the added supply is unlikely to move the needle on affordability in any noticeable way. Higher retention rates for smaller homes are probably due to the fact that their owners are more likely to have paid off their mortgages. For example, 72.8% of starter-home owners ages 70 to 79 own free and clear, compared with 65.1% of family-home owners and 58.9% of large-home owners. With less financial pressure to sell, they stay put longer.

Family homes: These make up 9.9 million, or 71.2%, of all homes released, nearly 1 million per year. The annual rate represents 24.7% of recent listings. If half of those reach the market, family-home listings would rise 12.3%. Trade-up buyers could benefit from more choice and softer prices, which in turn frees up starter homes for new buyers.

Large homes: These are about a quarter of the total, at 3.6 million, but they see the biggest relative impact. The 360,000 released per year on average equal 67.2% of recent large-home listings, or 33.6% if only half reach the market.