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The U.S. real estate industry is expected to see nearly 14 million homes owned by members of the Baby Boomers and Silent Generations hit the market over the next decade — although that won’t directly lead to an influx of starter home listings, according to a new report.
A Realtor.com analysis found that 13.9 million homes are currently owned and occupied by baby boomers and members of the silent generation, expected to come onto the housing market between 2026 and 2036.
This figure represents an increase of 33.7%, or 3.5 million dwellings, compared to the pace of the previous decade for older households; an increase of 74% or 5.9 million households over what Baby Boomer and Silent Generation households have passed on over the past decade.
However, the influx of homes coming onto the market over the next decade will have a relatively minor impact on the supply of starter homes with two bedrooms or less – as a high retention rate for homes in this category means only 0.38 million are expected to be released over the next decade.
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Single-family homes and larger homes are expected to come on the market in greater quantities due to the aging U.S. population, the report notes. (Brett Coomer/Houston Chronicle via Getty Images)
Realtor.com economist Jiayi Xu wrote the report and told FOX Business that “the direct impact on first-time starter home buyers will likely be limited, as relatively few of these homes come to market.”
“There is, however, a second indirect mechanism: When existing new homeowners upgrade to family-sized or large-sized homes, their starter homes become available, which could add to the supply of starter homes,” Xu said. “As this chain works indirectly, it will take time to come to fruition.”
The report notes that the annualized starter home release rate stands at 38,000 per year, representing just 3.2% of starter home listings in 2026.
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Realtor.com said generational succession could create more affordable access to family homes and larger homes for those currently in starter homes. (Mike Blake/Reuters)
Generational change in the housing market is expected to have a greater impact on family homes, which are classified as having three or four bedrooms, with around 9.9 million units released over the next 10 years. On an annual basis, the release of around 1 million family homes would represent around 24.7% of recent listings in this category.
The expected average exit of 360,000 large homes per year would represent 67.2% of recent listings, and if only half hit the market (33.6%), it would mark the largest relative increase of any segment in Realtor.com’s analysis and the area where generational succession will have the most immediate impact.
The estimated 10-year retention rate among members of the baby boomer and silent generations is projected at 70.7% for starter homes, compared to 61.2% for family homes and 63.6% for larger homes.
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Older Americans are more likely to keep a starter home than a family home or a larger home, the report found. (Paul Bersebach/MediaNews Group/Orange County Register via Getty Images)
Realtor.com noted that this dynamic is likely to contribute to lower prices in the family home and larger home segments, which could make trading in more affordable for those currently living in starter homes.
“For family homes and larger dwellings, we expect real price weakness to gradually emerge, driven by the significant volume of housing these segments will release and a slowdown in household growth on the demand side,” Xu said.
“If buyers are looking to move to a family home or a larger home, timing could actually work in their favor. These two segments should see a notable increase in supply compared to the three we studied, more inventory, more bargaining power and probably some decline in prices as this happens over the next decade,” Xu said.
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