Even before the COVID-19 pandemic, the U.S. housing market has been out of balance, with demand outstripping the supply of single-family homes. The pandemic, with its remote work opportunities, just made it worse.
This year, housing inventory finally started to improve, but even with millions of baby boomers downsizing, the homes that are expected to sell in the next few years, in what real estate marketplace Zillow calls a “silver tsunami,” won’t help that much because these homes aren’t where young families want to be.
Zillow data show that in 2022, there were approximately 20.9 million empty-nest households nationwide. These households consist of residents aged 55 or older who have lived in the same home for over a decade, have no children at home, and possess at least two extra bedrooms.
This figure contrasts sharply with the 8.1 million families living with nonrelatives who likely need their own space.
According to Zillow researchers, the issue lies in the geographic distribution of these empty-nest homes. They are predominantly located in less expensive markets, which are not the preferred destinations for young workers.
Pittsburgh has the most empty-next homes
Among the 50 largest U.S. metropolitan areas, Pittsburgh leads with the highest share of empty-nest households at 22%, followed by Buffalo and Cleveland at 20%, Detroit and St. Louis at 19%, and New Orleans at 18%.
These cities, except for New Orleans, are already among the top markets with affordable homes and have a lower proportion of household heads under the age of 44.
At the same time, cities like San Jose, Austin, and Denver, which attract a significant number of millennials and Gen Zers, are among the most expensive in the nation. These areas have a smaller share of empty-nest households than the national average, exacerbating the housing affordability challenge.
The high demand in these coastal job centers means that an influx of homes from older owners, often referred to as a silver tsunami, would have a limited impact on easing affordability pressures.
The problem with new construction
Zillow's research suggests the key to resolving the housing shortage lies in building more homes. But markets with severe housing shortages often face stringent land-use restrictions, which hinder new construction and make it more expensive.
Promoting denser construction and removing barriers to homeownership, such as providing credit assistance, down payment help, and closing cost support, could improve access to housing, researchers say.
"Even if we did see a 'silver tsunami,' a look at the map tells me it wouldn't really move the needle in terms of solving our housing affordability crunch," said Orphe Divounguy, Zillow’s senior economist. "These empty-nest households are concentrated in more affordable markets, where housing is already more accessible — not in the expensive coastal job centers where young workers are moving and where more homes are most desperately needed."
A wave of baby boomer home sales probably won’t resolve the housing shortage because Zillow data show these homes aren’t where the jobs are.