Concern Over Baby Boomer Home Owners
Baby Boomers, those born between 1946 – 1964, own approximately 32 million homes (or 2 out of every 5 homes) in America. It’s this notable chunk of the housing market that has become the subject of two studies conducted by Fannie Mae’s Economic and Strategic Research group and the Stephen S. Fuller Institute at George Mason University. Both of these studies make a similar case that the inevitable sell off of this sizable demographic could, potentially, outstrip the demand of the younger generations, triggering a housing bust. If you read my last article spotlight you may be getting whiplash considering the subject matter of the previous article was dealing with potential troubles caused by reluctant sellers, in this case the scenario is flipped.
At the end of the day no one can see into the future and assert what conditions may cause certain effects, which is why I believe a varied perspective is valuable. At least in the case of these two studies, the consequences of the cited concerns would not hit fever pitch until around 2026 – 36, so only time will tell. Until then, we can keep an informed eye on the horizon and hopefully adjust if any less than desirable consequences come to pass.
At a Glance:
“With the oldest Boomers now in their early 70s, the beginning of a mass homeownership exodus looms on the horizon, fueling fears of a “generational housing bubble” in which homeownership demand from younger generations is insufficient to fill the void left by multitudes of departing older owners.” – Source: The Coming Exodus of Older Homeowners.
“Nationally, discussion of the “Baby Boomer Sell-Off” began in 2013 but this trend has not yet come to fruition, in part because of economic trends including delayed retirement as a result of the Recession and remaining years left on home mortgages…As these owners downsize or move elsewhere in the nation, supply would increase. Especially in certain neighborhoods, the potential for increased supply is large enough to moderate price gains.” – Source: Demographic and Economic Factors Affecting the Upcoming Home Sales Market in the Washington Region.
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