Real Estate Outlook: Declining boomer ownership will free up 9.2 million homes by 2035, Freddie Mac says

As baby boomers age, the their homes are going to start hitting the open market. In a new report from Freddie Mac, estimates on the declining real estate outlook for homeownership in this demographic will free up about 9.2 million homes by 2035.

Right now, boomers have a pretty large grip on the US housing market. This generation accounts for about 21% of the total US population, but own 38% of American homes, according to Freddie Mac.

“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 the real estate outlook over the next decade or so, as more people age past 75, they will let their homes go 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 this demographic as of 2022 will drop to 23 million in 2035, when the oldest boomers will be close to 90 years old.

Cumulative decline in boomer-owned households Freddie Mac

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.”

In that case, the number of homes freed up in the real estate market would be about 1 million less than forecasted.

Even so, as more homes flood into the market, the rising demand of younger generations — notably Gen Z — is expected to more than offset the decline in boomer homeownership, the report found.