WASHINGTON – Aug. 7, 2018 – New studies suggest that the housing market could feel "shock waves" as baby boomers downsize or leave the market altogether.
According to a study by Fannie Mae's Economic Strategic Research Group, homeownership demand from younger generations is "insufficient" to replace the void being created if a notable number of older homeowners leave the market.
Meanwhile, researchers at the Stephen S. Fuller Institute at George Mason University say there is a significant number of older owners of large homes in the Washington D.C. area, and these could cause a "baby boomer sell-off" that could be repeated in other parts of the country.
Baby boomers own about two out of five residential properties in the United States, with other generations owning only a combined 14 million homes. According to the Fannie Mae researchers, as many as 11.9 million of these older owners will exit homeownership over a 10-year period – between 2016 and 2026 – followed by another 13.1 to 14.6 million between 2026 and 2036.
According to the study's authors, younger generations don't have the same desire or financial means to purchase all the homes left by baby boomers.
However, University of Southern California professor Dowell Myers argues that it's impossible to predict price impacts 10 years from now, and National Association of Realtors® Chief Economist Lawrence Yun believes population growth and the impact of foreign buyers should ensure "no measurable declines" from baby boomers.
Source: RealtyBizNews (07/25/18) Wheatley, Mike
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