One of the driving factors behind the lack of affordable housing in the United States is a matter of supply and demand. As younger generations enter the housing market, there has been a hope that older generations who live in larger homes and then become empty nesters will downsize.
That would bring an influx of available housing to the market, a “silver tsunami,” it’s been called.
But according to a Zillow press release, those new to the market shouldn’t hold their breath. Older generations aren’t downsizing at a high rate, and where they are, it’s in cities where there isn’t as high of a demand for homes.
“Even if we did see a ‘silver tsunami,’ a look at the map tells me it wouldn’t really move the needle in terms of solving our housing affordability crunch,” Orphe Divounguy, a Zillow senior economist, said in a recent press release. “These empty-nest households are concentrated in more affordable markets, where housing is already more accessible — not in the expensive coastal job centers where young workers are moving and where more homes are most desperately needed.”
According to the report, there is an “oversupply of 12.8 million empty-nest homes,” but it’s not in places where the demand is most needed.
Cities with a higher potential for a silver tsunami:
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Pittsburgh, Pennsylvania.
Baby boomers — currently between the ages of 60 and 78 — make up more than half of homeowners in the country. Last year, the average age of a home seller was 63, the highest age ever recorded, per the National Association of Realtors.
Construction work on the Cottage Homes development in Sandy on Monday Dec. 9, 2024. | Scott G Winterton, Deseret News
“The median first-time buyer age increased to 38 years old this year, increasing from 35 last year, while the typical repeat buyer age also increased to 61 years from 58 last year. These ages are all record highs.”
Having one of the youngest populations in the country, Utah should not be anticipating a silver tsunami to relieve the state from its supply shortage. Salt Lake City ranked among one of the top markets leading in homeownership, headed by those under 44 years old. The lack of housing supply remains a prominent issue in Utah as it has had high migration numbers moving into the state in the last few years.
On a national scale, “The number of empty nest households does exceed the number of families in need of housing: by 2.6 times. There were 20.9 million empty nest households in 2022 compared to 8.1 million families living with non-relatives that were likely in need of their own unit, and that surplus has grown over time,” per Zillow. “From 2017 to 2022, the number of families doubling up — living with non-relatives — grew by 500,821. During that same period, the number of empty nest households increased by 703,892.”
Looking at the current state of the market, it may not come as a shock that homeowners don’t want to budge. They may view downsizing as not a financially viable option, especially when many older homeowners locked in low mortgage rates compared to the less appealing 6.69% national average 30-year fixed mortgage rate reported last week by Freddie Mac.