Baby boomers to release 14M homes, but starter home supply stays low: report

Key Points:

• Nearly 14 million homes owned by baby boomers and the Silent Generation are expected to be released to the U.S. housing market between 2026 and 2036, representing a significant increase compared to the previous decade.
• Despite this large influx, the release of starter homes (two or fewer bedrooms) will be limited, with only about 380,000 expected to enter the market over the next decade due to a high retention rate among older homeowners.
• The generational shift will have a greater impact on family homes (three to four bedrooms) and large homes, with an estimated 9.9 million family homes and a substantial number of large homes becoming available, potentially leading to increased supply and price softness in these segments.
• This increased availability of family and large homes may indirectly benefit first-time buyers, as current starter home owners trade up, freeing more starter homes over time, though this effect will take time to materialize.
• Realtor.com economists predict that the rise in supply of family and large homes will likely result in more negotiating power and price relief for buyers in these categories, while starter home availability and affordability will see only modest changes.