- Meredith Whitney, pointing to the 2008 crash, said a “silver tsunami” would increase the supply of housing to the market.
- Whitney told Yahoo Finance that more baby boomers are considering downsizing to free up inventory as the population ages.
- “The price of used homes will fall.”
Baby boomers are aging and will start downsizing their homes at a faster pace. And that’s good news for the housing market, one expert says.
Meredith Whitney, credited with sparking the 2008 housing crash, said aging boomers moving into smaller homes will free up inventory and bring a wave of supply to the market.
“Another major demographic trend is America’s aging population, with 10,000 people turning 65 every day in what has been called the ‘silver tsunami,’ and by 2030, the entire baby boomer generation will have reached the age of 65. Whitney said. told Yahoo Finance on Thursday. “That’s 20% of the U.S. population.”
This trend will contribute to lower prices, as more homes on the market will cushion the impact on housing demand. This is a big change from previous years, when a massive supply shortage pushed home prices to all-time highs.
However, more homes appear to be coming onto the market, although trends vary by region.
“New home builders will create more affordable housing, and existing housing prices will go down,” Whitney said.
House prices remain high, while mortgage interest rates are at multi-year highs, although they have trended downward over the past month. DoubleLine Capital said this week that 5% interest rates are the “magic number” that allows prices to fall.
“If you lower the overall price of the home, maintenance becomes more affordable,” Whitney says. “I think that’s bound to happen because there will be more seniors, there will be a silver tsunami for sale, there will be fewer buyers, and home prices will be cheaper.”
For now, Whitney said he would advise millennials to wait to buy, while boomers would advise to sell.
Watch now: Popular videos from Insider Inc.
Loading…