The loss of older adult households, which will only continue as the boomers age, has dampened household growth and new housing demand.
The oldest baby boomers will begin turning 80 this year, marking a major milestone that will have implications for the housing market for years to come.
The number of households headed by baby boomers declined by 3.5 million between 2015 and 2025, a trend that will only accelerate in the coming years, according to new research from the Joint Center for Housing Studies of Harvard University.
The accelerated loss of older households suggests that less new construction may be needed to accommodate future generations, as millions of existing homes will be vacated. However, the transition will need to be managed carefully, to ensure vacated units are returned to the housing stock rather than falling into obsolescense, the study warns.
"As such, managing the growing number of vacated units will be a concern for both the public and private sectors in the decades ahead, with major implications for neighborhoods and markets, home prices, rents, and housing affordability more broadly," writes JCHS senior housing associate Daniel McCue.
The boomer generation has a longer life expectancy than the generations before them. When the first boomers were born in the 1940s, the life expectancy was 63 years. Now, the life expectancy in the U.S. is 79 years, according to the Centers for Disease Control and Prevention.
Due to the combination of the baby boomers being the largest generation in history and their increased life expectancy, both the number of people and the number of householders in the over-80 age group are projected to double in the next two decades, according to new research from the JCHS.
Older adults typically need more housing units per person, due to the fact that they most often live with just one other person, their spouse, or alone if they are widowed. However, an aging population can also have a negative impact on household headship due to having higher rates of mortality and disability than younger age groups.
These negative impacts on demand have now overpowered positive impacts, leading to a net negative change in housing growth.
Older households shrink as younger household formation fails to keep pace
The loss of older adult households, which will only continue as the boomers age, has dampened household growth and new housing demand despite the increased pace of new household formations by young adults.
Harvard found that from 1975 to 1985, when baby boomers were just forming households as young adults, the 740,000 average annual losses of households 55 and over came to only a third of the 2.2 million new households formed annually by adults under 35.
Comparatively, in 2014 to 2024, the annual loss of older households increased to 1.3 million due to the larger older adult population. This number amounted to nearly half of the 2.7 million net new households created by younger adults at that time.
These numbers show that, despite a considerable increase in new household formations, the total household growth was similar in both eras.
In the coming years, as the baby boomers continue to age, household losses will continue. Harvard’s projections show an average annual loss of 1.6 million households of those 55 and older between 2025 and 2035, which is 300,000 more than the previous decade of 2014 to 2024. By the window of 2035 to 2045, the annual number of losses will increase to 1.9 million.
Simultaneously, the formation of new, younger households is projected to decline, adding to the decrease in net household growth and demand for new housing.
The loss of older adult households, which will only continue as the boomers age, has dampened household growth and new housing demand. (Stock image) (Getty Images) Net formations of households for those under 35 will fall to 2.4 million annually between 2025 and 2035 and further to 2.3 million between 2035 and 2045.
The decrease in new households under the age of 35 has a couple of potential causes. First, the fertility rate is falling. Generations have gotten smaller since the baby boom, although annual birth rates have fluctuated based on economic factors. During the Great Recession in 2008, the annual birth rate dropped and has continued to decrease since. As the children born in 2008 turned 18 this year, the number of Americans entering adulthood will be smaller and smaller each year.
Additionally, the lack of affordable housing has caused the average age of the first-time homebuyer to jump.
“Younger buyers are getting in about a decade later than their parents did. In the [National Association of Realtors®] 2025 Profile, first-time buyers made up just 21% of purchases, the lowest share on record, and the median first-time buyer was 40,” Daniel Yoon, a real estate agent in Richmond, VA, told Realtor.com®. “Before 2008, that share was closer to 40%. In the 1980s, most first-time buyers were in their late 20s.”
As seniors continue to move out of their homes, there will be less need for new construction to accommodate new households than in previous years, according to the report’s author McCue. That is, as long as units given up by older homeowners are returned to the market promptly and not forgotten about and in need of major repairs.