Last week on the Knowledge Brokers Podcast, ResiClub founder Lance Lambert joined Byron Lazine, Lisa Chinatti, and Tom Toole to discuss several topics related to the U.S. housing market. 

One of the first topics they covered was the “silver tsunami” projection made by analyst Meredith Whitney regarding the aging boomer demographic and its impact on housing supply. 

Byron asked Lambert whether he agreed with Whitney’s suggestion that, as boomers reach the age of 65 over the next several years, there will be a “silver tsunami” of boomers downsizing or exiting the housing market, which will open up more housing inventory. 

Lambert’s response focused on two related dynamics in the U.S. housing market. 

#1—Boomer sellers on one side, Gen X/Millennials/Gen Z buyers on the other

The first dynamic has to do with the size of the younger demographics in relation to boomers.

Baby boomers are a huge generation. And they were much bigger than the generations before them. But in terms of total numbers, the millennials and Gen (Zs) are actually fairly big….And the numbers are actually misleading because the millennials and Gen Zers are actually bigger than they appear. And the reason being is immigration. Especially for Gen Zs and some of the people under 18, that cohort hasn’t even arrived yet. A lot of them start to arrive at 18 to 25.

Lance Lambert

ResiClub founder

So, while a larger number of baby boomers may be leaving the housing market and selling off their properties over the next 5-10 years, there will still be plenty of Gen X, millennial, and Gen Z buyers out there looking for homes. 

The most vulnerable markets are the tightest in the country for inventory

The second thing to consider is the inventory situation in the markets most vulnerable to a “silver tsunami” effect. 

When you look at the housing market, the markets that are probably going to be the most vulnerable to this are some of the more rural parts of the Midwest, rural parts of the Northeast. And what’s true right now, those are the tightest parts of the whole country for inventory. So, if there is some type of ‘silver tsunami,’ we’re not seeing it yet in the data at all. And it’s actually kind of the opposite.

Lance Lambert

ResiClub founder

From what Lambert’s data is showing right now, the very markets that, population-wise, seem most vulnerable to a silver tsunami are actually more likely to see the opposite. 

Instead of a mass exods of boomers creating a surplus in housing supply—to the point where home prices go down—these markets are so tight in inventory that even with boomers selling their homes in larger numbers, inventory will still fall short of demand, which is also likely to increase as more Gen Zers enter the market. 

Why inventory is so tight in these markets

Another thing Lambert has noticed is that markets where you might think the silver tsunami would be most likely to happen—areas that have a higher share of older residents—aren’t getting much attention from builders. 

One of the reasons that some of these markets could be so tight for inventory is there’s just not a lot of builders there, because builders kind of understood this. And so the marketplaces kind of already worked some of this out. Because those places just haven’t gotten the investment the past 10/15/20 years. 

I think it would be a different story if there was super-rampant overbuilding happening all across the nation, whereas right now you really see it focused in the Sunbelt and the Smile States down south that have a lot of growth and will continue to have a lot of growth.

Lance Lambert

ResiClub founder

Even if we see a marked increase in boomers downsizing or leaving the housing market altogether, it’s not likely to create an oversupply of homes this year or even over the next few years. That’s because the markets most susceptible to a larger influx of new listings are where supply is the tightest. And even with the aging demographic in these markets, there will be plenty of buyers ready to pick up the slack.

So, as Byron put it, “Do not count on the silver tsunami” — especially as soon as 2024. 

Lambert agreed, saying “It’s too soon.” In those rural Midwest and Northeast markets where so many younger people have left (and haven’t been replaced), they’re going to see a decline in their populations.

Those would be the places to watch. And right now, we’re just not seeing the inventory in those places. A lot of them are still down 70-60% from pre-pandemic levels.

Lance Lambert

ResiClub founder

Going by the data, it doesn’t seem likely that these markets will see a surplus of inventory anytime soon, let alone anything that could be described as a tsunami. 

Keep up with Lambert’s reporting on ResiClub and follow him on X/Twitter for more insights.