Young People Can’t Buy Homes Until Older Owners Move

A residential housing development stands in northwest Atlanta, Georgia. Photographer: CHRIS RANK/Bloomberg News

For a generation of prospective homebuyers in the U.S., there are two chronic problems with the housing market: an overall lack of supply, and low affordability in many markets. As policymakers think about this, they usually focus on how to create more supply by building. While that idea should be pursued to its fullest, the reality is that development takes time, and many areas resist it — so much so that the more likely significant relief for the housing crisis will come as baby boomers’ houses go on the market.

To put the supply situation for young would-be buyers in perspective, it helps to look at the change in the age composition of homeowners since the peak of the last cycle. With newly-released 2018 data now available, we can see that since 2006, the number of homeowning households in the U.S. has increased by 2.8 million, with 2 million of that increase occurring in 2018 alone. Broken down by age, older homeowners — those 55 and over — have increased by 9.6 million, while younger homeowners — those under 45 — have decreased by 4.3 million.