A new study by the Bipartisan Policy Center’s Housing Commission sees many Baby Boomers selling their homes as age, downsize, and retire. The study projects that Boomers will divest themselves of as many as 26 million housing units over the next 20 years.
The problem is that the generation that should now be entering the market for homes, the Millennials, are not generally in a position to afford them. As we noted last week, a combination of high real estate values, lower real wages, tight credit, and high indebtedness is preventing many Millennials from realizing the dream of owning a home at the same age as previous generations. Ironically, most Millennials who can’t buy homes now are children of the Baby Boom generation that is trying to sell them.
The study warns that the glut of expensive housing put on the market by Boomers, combined with the constrained home-buying power of Millennials, could depress the housing market for some time to come while keeping rents high.