By Catherine Koh | National Association of Homebuilders
The “silver tsunami” refers to the wave of housing inventory expected as older homeowners downsize or transition out of their homes. According to the latest American Community Survey, there are an estimated 61.2 million people in the U.S. aged 65 years or older, representing about 18% of the population. This cohort, which includes the Boomer and Silent generations, is characterized by a high homeownership rate (78.6%), and currently owns 29.6 million homes in the U.S. or 34.1% of all owner-occupied housing units. As a group, they hold an estimated $13.8 trillion dollars in housing value, or roughly one-third of the total residential property value in the country.
Given the outsized share of homes occupied by Baby Boomers, the release of this housing stock will have a significant effect on housing markets. However, the effect across regional markets will vary greatly depending on the prevalence of aging householders, migration patterns, and the severity of affordability constraints. While some markets with aging populations and negligible in-migration may face a surplus, markets that attract younger population, as well as supply-constrained markets with suppressed household formation can easily absorb units released by Baby Boomers.
