A new wave of housing could be coming to the U.S. market over the next decade as baby boomers and members of the Silent Generation age out of their homes — but the shift likely won’t do much to ease the shortage of affordable starter homes, according to a new analysis from Realtor.com.
The report estimates that 13.9 million homes currently owned and occupied by baby boomers (born 1946-1964) and the Silent Generation (born 1928-1945) are likely to come onto the market between 2026 and 2036. That’s a 33.7% increase, or 3.5 million more homes, compared with the pace of the prior decade. Measured against the decade before that, it represents a jump of 74%, or 5.9 million homes.
The increase is tied to simple demographics: as these older generations age further, move into care facilities, move in with family, or pass away, their homes are freed up for new buyers.
Starter Homes Won’t See Much Benefit
Despite the scale of the coming turnover, the report found it will have little effect on the supply of starter homes — those with two or fewer bedrooms. Only about 0.38 million such homes are expected to be released over the next decade, because retention rates for smaller homes among older owners remain high.
That’s a significant gap for young, first-time buyers, who have long relied on smaller, simpler homes as an entry point into homeownership. Decades ago, many suburban neighborhoods were built around modest two- or three-bedroom, one-bathroom houses — inexpensive, low-maintenance, and well suited to young couples and growing families.
Much of that housing stock has since been bypassed in favor of larger homes. Since the 1980s and 1990s, new residential construction in many metro areas has leaned toward two extremes: apartment and condo buildings on one end, and larger, more expensive single-family homes on the other.
As a result, it’s the bigger, pricier homes — not starter homes — that are expected to make up most of the new supply hitting the market in the coming years, simply because there are more of them in that generation’s hands and they’re being vacated at a higher rate.
For buyers hoping to break into homeownership with a smaller, more affordable property, the report suggests that relief won’t come primarily from older generations downsizing or passing their homes along. Instead, increasing the supply of starter homes will likely require new construction specifically aimed at that segment of the market.
