U.S. Housing Market Faces Urgent Shift: Deaths to Exceed Births

URGENT UPDATE: The U.S. housing market is on the brink of a significant demographic shift, according to real estate analyst Nick Gerli. New reports indicate that by 2033, the number of deaths in the United States is projected to surpass the number of births, triggering major changes in housing demand.

As highlighted in a recent report from the Congressional Budget Office (CBO), the population growth rate will slow dramatically over the next three decades, dropping from 0.9 percent (1975-2024) to a mere 0.2 percent by 2055. This worrisome trend poses immediate implications for the housing market, impacting buyers across the nation.

For years, the U.S. has grappled with a housing shortage, with demand consistently outpacing supply. Younger generations, in particular, have struggled to enter the market, often unable to compete with wealthier, older buyers in bidding wars. Current economic pressures, including soaring mortgage rates and property taxes, have left many Americans postponing family plans, further exacerbating declining birth rates.

Gerli, founder and CEO of Reventure App, warns that the anticipated demographic shift could lead to a permanent decline in homebuyer demand. “More deaths than births by 2032-33 will result in structurally lower homebuyer demand as fewer young families seek to purchase homes,” he stated in a post on X.

The implications are profound: as the Baby Boomer generation ages and passes away, it is estimated that there will be 9 million fewer Baby Boomer homeowner households by 2035. This shift is expected to flood the market with more inventory, potentially leading to a significant drop in home prices, creating a more favorable buying environment for future homeowners.

According to Gerli, this demographic decline will be felt across the country, from California to Florida, though some regions may experience the effects sooner. For instance, Florida is currently facing a decline in births, with reports indicating a 4 percent decrease.

As fewer families seek larger homes, the demand for spacious properties may diminish. Gerli notes, “The appeal of large homes is tied to family stability. If fewer people are looking to raise families, demand for larger properties will decline.” Instead, there may be a rising interest in smaller homes, signaling a shift in housing preferences nationwide.

“Many participants in the housing market are ignoring this issue, which does not bode well for home prices,” Gerli cautioned. “Serious homebuyers and investors need to understand how demographic changes will impact their areas.”

The CBO’s report emphasizes that without immigration, the U.S. population could begin to shrink after 2033. Rising fertility rates from earlier decades may not return, making immigration a critical factor for future population growth. Gerli suggests that while trends point to a continued decrease in births, unexpected societal shifts could alter the trajectory, similar to the baby boom experienced in the mid-20th century.

WHAT’S NEXT: As the American population ages, the future of the housing market will hinge significantly on immigration trends. Gerli remains cautiously optimistic, stating, “Things could shift, but current trends suggest a continuation of this slowdown in births.”

With these developments unfolding, staying informed about changes in the housing market will be crucial for potential buyers and investors alike. The next few years will be pivotal in determining the landscape of American real estate.