Have you ever heard the term “Silver Tsunami” and wondered what it’s all about? If so, you’re not alone. There has been a lot of chatter about it online lately. In this blog, we’ll dive into what the Silver Tsunami means and why it’s unlikely to have a drastic impact on the housing market in 2024.
What Does Silver Tsunami Mean?
According to a recent article from HousingWire, the term “Silver Tsunami” is a colloquialism referring to aging Americans changing their housing arrangements to accommodate their evolving needs as they grow older. The idea is that as baby boomers continue to age, a significant number of them will start downsizing their homes. Given the size of the baby boomer generation, this could potentially lead to a wave of larger homes hitting the market, affecting the balance of supply and demand.
In theory, this concept makes sense. However, will it really happen, and if so, when?
Why It Won’t Have a Huge Impact on the Housing Market in 2024
Experts suggest that, so far, the Silver Tsunami has not materialized in any significant way, and it’s unlikely to do so anytime soon. According to the same HousingWire article, “the silver tsunami’s transformative potential for the U.S. housing market has not yet materialized in any meaningful way, and few expect it to anytime soon.”
One key reason for this is that many baby boomers don’t want to move. Data from the AARP shows that over half of surveyed adults aged 65 and up plan to age in place in their current homes rather than downsize or move. Clearly, not every baby boomer is planning to sell or relocate, and those who do won’t all do it at once. It’s a gradual process that will occur over many years.
Mark Fleming, Chief Economist at First American, explains, “Demographics are never a tsunami. The baby boomer generation spans almost two decades of births, which means it will take about two decades for them to work their way through any significant housing market changes.”
Bottom Line
If you’re concerned about a Silver Tsunami disrupting the housing market, you can breathe easy. Any impact from baby boomers making housing changes will be gradual and take place over many years. As Fleming succinctly puts it, “Demographic trends don’t create tsunamis; they trickle.”
So, if you’re in the market for a home in 2024, you can expect stability rather than a sudden wave of change due to the aging population. The housing market will continue to evolve, but it will do so at its own pace.