Local News
You’ll be waiting a while. Empty nesters aren’t flying the coop anytime soon.
Baby boomers own a significant chunk of the housing stock in Massachusetts. Don’t count on that changing to solve the housing shortages anytime soon.
Baby boomers — those from age 58 to 76 — accounted for nearly 39 percent of the homeowner pool statewide in 2023, according to Redfin’s most recent data.
Nationwide, about 21 million homes are “empty nests” — those with at least three bedrooms and occupied by residents 55 and up with no children at home, according to Zillow. That has the potential to more than make up for the estimated 4.5 million unit national home shortage.
But for all the talk of a pending “silver tsunami” of generational wealth — and housing — transfer to younger demographics, experts caution this won’t be a flash flood of supply.
“A lot of people in our industry have been thinking about this idea that there would be maybe a big wealth transfer, that maybe there would be a lot of baby boomers [with homes] coming on the market at some point,” said Orphe Divounguy, senior economist at Zillow. “But unfortunately, our research shows that there’s just not enough of those older families.”
Baby boomers also are staying in their homes longer than ever, meaning you likely shouldn’t expect a sudden jolt of new supply: 40 percent of American baby boomers have lived in their current homes for at least 20 years, according to Redfin.
Redfin also noted empty-nest baby boomers owned 25 percent of large homes (those with at least three bedrooms) in Greater Boston in 2022 — compared to millennials with children owning just 12.5 percent of the supply.
What’s keeping these older homeowners parked in their current abodes rather than downsizing? Money talks, but the high cost of moving — especially when it pertains to higher mortgage rates compared to what they might have on their existing homes — has caused many to decide not to leave their longtime homes.
Seventy-eight percent of baby boomers nationally planned to age in place, an increasingly standard plan for older homeowners, according to Redfin.
Empty nests would need to be more concentrated in markets with the largest housing shortages — like Greater Boston — to make a dent in home prices. But that isn’t the case.
In the local market, Zillow notes there are 281,773 empty nests, or about 14 percent of the local housing supply. That’s slightly less than the 16 percent national average of empty nests found coast to coast.
“Boston is a younger place, and there’s just not enough of these older homes available, even if all of them came on the market someday,” Divounguy said.
It’s not just empty nesters occupying larger homes that’s driving some of the supply shortage.
“Many baby boomers have had very prosperous careers, and that has led to many of them owning multiple properties, whether it be that they own a primary residence and secondary for vacationing, or perhaps a primary and then also in owning investment properties as part of their portfolio,” said Sarah Gustafson, president of the Massachusetts Association of Realtors. “With that, they’re taking up so much of that available inventory, it’s exacerbating the housing shortage that we’ve seen over the past couple of years.”
Many older homeowners just prefer to stay where they are.
“The most common reasons [for baby boomers deciding to age in place] are that people like where they live and that there is no good alternative for them,” said Chen Zhao, economics research lead at Redfin. “That’s really what it boils down to.”
Think of the pending generational wealth and housing supply transfer more like a trickle than a tsunami, according to the Redfin team. Higher mortgage rates and home prices increase the supply shortage in a market like Greater Boston.
“It’s going to be a long while coming,” Zhao said. “Boston has probably one of the tighter home markets and is one of the places where it seems like the market is frozen.”
There are a mix of policy levers a region like Greater Boston can pull to help younger generations with housing accessibility and affordability. Governor Maura Healey’s Unlocking Housing Production Commission examined the state’s housing shortage and noted single-family-only zoning is a key obstacle, blocking more housing construction.
The commission recommended eliminating single-family zoning across the state in a move that wouldn’t ban single-family homes from being constructed. Instead, the measure would prohibit municipal governments from blocking many multi-unit housing proposals on residential lots.
“The solution is not to wait and hope for existing homes to come on the market. It’s to help the builders build more housing,” Zillow’s Divounguy said. “Boston happens to be one of the more restrictive markets in terms of building restrictions. It means loosening some of these building restrictions in the metro area and allowing for more construction.”
There also are much longer-term solutions to some of the housing shortage. Baby boomers and millennials are larger generations, and that presents a multigenerational need for housing.
But declining birth rates in the US and expected lower immigration rates also can mean decreased housing demand in the distant future — emphasis on distant.
“I’m not saying it’s going to happen immediately, but at some point this does make a difference for housing demand and our housing shortage,” Zhao said.
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