Rewriting the Silver Tsunami: The Impact of Aging Americans on the Housing Market

As America continues to age, the “Silver Tsunami” could have a significant impact on the U.S. housing market. Analysts such as Meredith Whitney have stated that by 2030, when the entire baby boomer population is over 65, they will make up 21% of the total U.S. population. According to the AARP, 51% of people over 50 downsize their home, adding up to 30 million homes that would be coming on the market each year, dwarfing the most active year the U.S. has seen for home sales. This aging trend will likely persist for several years and result in lowering of home prices.

Will the Silver Tsunami Change the U.S. Housing Market?

Meredith Whitney believes that the Silver Tsunami of aging Americans has the potential to drastically change the U.S. housing market. While this trend may have yet to yield any significant changes, the outsized rate of homeownership among older Americans could have a far-reaching effect, lowering prices and making it more affordable for first-time homebuyers. It may also necessitate the use of specialized products and services such as reverse mortgages and Home Equity Conversion Mortgages (HECM) to allow more seniors to purchase new homes.

What Can Seniors Do to Take Advantage of the Silver Tsunami?
HECM for Purchase (H4P) is a lesser-used HECM variant that could provide seniors with the opportunity to purchase a new home using a reverse mortgage. FHA proposed a seller credit for the H4P program in October 2019 to incentivize seniors to take advantage of this option. Additionally, changes to home prices could also mean that more people will be able to qualify for traditional reverse mortgages. Therefore, it is important for seniors to stay informed of the potential changes so they can act quickly if need be.