The housing market will face an excess of demand for homes over the next decade as older Americans live longer and elect more often to age in place, per a new forecast from the Research Institute for Housing America (RIHA), a thinktank backed by the Mortgage Bankers Association (MBA).

The group recently released a report titled “Who Will Buy the Baby Boomers’ Homes When They Leave Them? An Update,” revealing revised findings from a similar study commissioned in 2022 using data collected through 2016. One of the takeaways from that study was that the projection of a “modest amount of excess supply” over the next 10 years — roughly a quarter million units per year. But digging deeper into updated supply and demand patterns, homeownership rates, and other demographic data as well as newly available projections of future population and mortality, RIHA has amended that supply forecast into what it termed a “negative excess.”

That shortage, RIHA estimates, will begin around a quarter million units annually but will increase over the next decade. The chief reason for the flip is simply that aging Americans are holding onto their homes for longer, and the graying of the population is resulting in more of them. Per RIHA’s report, there has been a meaningful increase since 2015 in the homeownership rate among people 70 years and older; when the market experienced a substantial increase in the homeownership rate thanks to the COVID-era homebuying boom, for example, it also saw more older Americans buying homes.

Mortality rates also play a part in the calculus, but while COVID had a temporary effect in death rates for older Americans, RIHA reported that, based on preliminary data from the Centers for Disease Control and Prevention (CDC) for 2023, the age profile of deaths has reverted back to pre-pandemic patterns.

Therefore, while homeownership patterns before 2015 would have forecast those homes sold, but with older Americans both living and aging in place longer, RIHA has amended its forecast.

“The findings highlight the varying patterns for older Americans as shifting demographics, the pandemic, and overall buyer attitudes have impacted buying and selling decisions,” said Edward Seiler, executive director for RIHA and associate vice president of housing economics for the MBA.

“It is evident that older households are aging in place, leading to updated predictions that show that there will be no excess supply of homes to the markets from older Americans moving or dying over the next decade.”