As baby boomers age, their homes are going to increasingly be hitting the open market. A new report from Freddie Mac estimates that declining homeownership for the group will free up 9.2 million homes by 2035. Right now, boomers have a pretty large grip on the US housing market. The generation accounts for about 21% of the total US population, but they own 38% of American homes, Freddie Mac found. “Boomers are overrepresented in the homeowner demographic because homeownership rates tend to increase as households age, gradually starting to decline as households age beyond age 75,” the report stated. This year, the youngest boomers will turn 60. That means that over the next decade or so, as more people age past 75, they will let go of their homes on the market.

Some top forecasters like Meredith Whitney have described this phenomenon as the “silver tsunami” that will bring a wave of inventory back to the market. The offloading of homes will accelerate in the 2030s as boomers reach the ages of 70 to 80, Freddie Mac said, based on an analysis using American Consumer Survey data. The 32 million homes owned by the generation as of 2022 will drop to 23 million in 2035, when the oldest boomers will be close to 90 years old.  But that’s assuming boomers’ household retention rates follow the same pattern as earlier generations. “It is possible that we may see a different outcome,” the report said. “The estimates based on historical retention rates may be too negative. Retention rates have been increasing over time as health outcomes for older Americans improved and life expectancy has increased.”

Source: Business Insider