9M Baby Boomers to Exit Housing Market by 2035—but Gradually

The "silver tsunami," a metaphor used to describe the coming influx of housing supply due to aging Baby Boomers looking to sell their homes as they downsize or because the Boomers have passed away, may not be the dramatic wave of inventory flooding the market that was once anticipated. Instead, Freddie Mac economists now describe the exit of Boomers from the housing market as being more of a gradual reduction, real estate newsletter ResiClub reports.

Freddie Mac estimates there will be 9.2 million fewer Baby Boomer households by 2035, but while the number of people aging out of homeownership will increase in coming years, it won't involve a disruptive spike in inventory. For example, in 2024, a 300,000 net decline in the number of Boomer homeowner households is expected, and that annual decline is predicted to gradually accelerate every year for the remainder of the decade, culminating in a net decline of 1.2 million in 2035.

And what effect is this Boomer selloff likely to have on the U.S. housing market?

“In our October 2023 Outlook, we presented estimates showing that there were as many as two million potential additional households in the Millennial generation. Along with increases from Gen Z, total housing demand over the next few years is likely to continue to increase even as the Boomers continue to exit the market. Over at least the next five years, we expect the increase in the young adult homeowner households to more than offset the decline in Boomer homeowner households,” wrote Freddie Mac economists.

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