Will the so-called Silver Tsunami save younger buyers who seek to crack homeowner barriers created by high prices and high interest rates?
The Silver Tsunami in the housing market refers to a projected increase in housing supply as the large aging baby-boomer generation moves from their large single family homes, creating much greater inventory.
A Silver Tsunami suggests a potential decrease in housing prices that will make housing more affordable to younger generations, currently being shut out of the market.
Still under debate: Whether this “silver” influx of homes will be massive or just a trickle. The effect of the Silver Tsunami is not expected to be immediate or a complete solution to the overall housing shortage, since many older homeowners will opt to stay in their homes, make upgrades, or downsize gradually.
What a Silver wave could mean for the housing market:
Increased inventory:
As boomers age and move into retirement homes, downsize, or pass away, their homes are expected to come onto the market.
More affordable prices:
The increased supply of larger homes could lead to more affordable prices for younger adults and those seeking larger properties.
Gradual impact, not a sudden flood:
The trend is expected to be a gradual reduction in boomer-occupied households rather than an overnight wave. Freddie Mac predicts 9 million net declines nationally by 2035.
Demand from younger generations:
The buying power of Millennials and Gen Z is expected to increase, and this demand from younger generations can help to balance the increased supply from boomers.
Baby-boomer actions may weaken the wave of increased homes for sale:
Many older homeowners are investing in upgrades to improve their existing homes rather than selling them to downsize, which would slow the predicted flood of homes. Some may even go so far to plan for or install a residential elevator, growing in popularity.
Summary: The Silver Tsunami could increase housing supply and potentially lower prices in certain areas. However, its overall impact is expected to be gradual; it is not seen as a quick fix to the housing-affordability crisis.