Much of the future available inventory will created by the aging-out of the oldest generations; by some estimates more than 4 million existing homes will hit the market in the next decade due to the finite morality of older homeowners, but experts believe this will only lead to a “minimal excess” in housing supply and have “no measurable reduction” in home prices.
This research comes by way of a new study from the Mortgage Bankers Association (MBA) titled “Who Will Buy the Baby Boomers’ Homes When They Leave Them” which analyzes data on housing, demographics, and mortality to examine the impact the aging and eventual death of Boomers may have on future demand and the supply of homes listed for sale by Americans over 50.
“America is growing older, with baby boomer homeowners totaling 32 million as of 2019 and increasingly becoming a larger source of existing homes for sale—4.4 million units annually—as they transition to other housing options or pass away,” said Gary V. Engelhardt, author of the report and Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. “Aging and mortality are glacial and largely predictable. Based purely on changing demographics and population growth, there is enough homebuyer demand to meet most of the existing inventory that will come onto the market over the next decade and beyond from older homeowners.”
The MBA’s findings also revealed that there will only be a “modest” amount of excess supply of homes for sale, around a quarter-million units through 2032, which will have no measurable impact on home prices as a whole. Most of the adjustment to the excess inventory will be through a reduction in housing starts and completions, which should also create some softness in the rental market.
“RIHA’s study skillfully uses multiple data sources to get a detailed picture of America’s aging population and its effect on the housing market,” said Edward Seiler, Executive Director of the Research Institute for Housing America, and MBA’s Associate Vice President of Housing Economics. “The impact from baby boomers exiting their homes is not insignificant but will happen over a few decades without significantly disrupting the housing market.”
Click here to view the 35-page report from the directly from the MBA.