The Housing Imbalance: Boomers at Fault

Barclays economists suggest that the housing imbalance and shortage in the market can be attributed to the aging baby boomer generation, who are fueling the demand for homes as they age. Contrary to the belief that older consumers would require fewer homes, it turns out that they prefer smaller dwellings but not fewer homes. The larger size of the boomer generation compared to previous generations means that they are using up more houses as they age, leaving less existing inventory for younger generations, particularly millennials. However, the current demand dynamics for housing may not persist in the future as the population in younger age groups is not as large. The housing shortage remains a major challenge for homebuyers, with rising mortgage rates and limited inventory pushing home prices higher.