Zandi isn’t alone in decrying how stuck the housing market has become. Meredith Whitney, the so-called “Oracle of Wall Street,” calculates that baby boomers now own over 54% of U.S. homes (up from 44% in 2008), and 79% are mortgage-free.
If you fail to account for the difference in generation population sizes, you end up with meaningless comparisons like saying “boomers” own 54% of US homes today versus 44% in 2008. The generation is large and as it grows older, it is larger than similar generations were in the past – we would expect this generation to own many of the homes, just based on it is a larger cohort than other generations. Duh.
Population Pyramid for 2008
Population Pyramid for 2025
Blaming “Boomers” is Lazy Thinking
The housing market is different now but blaming “boomers” for the problems is lazy. Interest rates today are below historical norms, as well. The main problem is the government exploded the money supply, creating high inflation. Real assets maintain their value in terms of deflated dollars – hence, it’s still the same house as before it takes a lot more worthless dollars to buy a home today.
The Problem Is We No Longer Build Small Homes
If “boomers” sell their home, they still need to live somewhere else – so that does not solve the problem. The problem is we no longer build smaller homes. For the past 35 years, since 1990, the average new US home has been over 2,000 sq ft, peaking at over 2,600 sq ft in 2015, and dropping to 2,400 sq ft in 2025.
The pundits think “boomers” should be downsizing into homes in the 1,200-1,800 sq ft range – a target size for which there are very few homes – because such small homes have generally not been built since 1960-1980. (I will have another post on this topic soon.)
The media morons and social media noise pushing the narrative that the housing problem is caused by “boomers” not downsizing are disconnected from the reality that we have not been building the smaller homes for 35-45 or more years. This is crap reporting disconnected from facts and reality.
Our first home was a true fixer upper, a former trashed rental property, 950 sq ft in size, with a 1-car garage. That type of home is mostly no longer available. Even old homes have been remodeled and enlarged. That’s the problem. Indeed, we remodeled our original small home and added to it, growing it to 1,450 sq ft. This happened to most of the old, small homes.
Today there are very few small homes like there were up through about 1970.
Only 8% of homes today are built and marketed as starter homes. The average size of a first-time buyer’s first detached single-family home is between 1,600 and 1,900 sq ft in 2025. The average size in 2025 is just over 2,400 sq ft, down from 2600+ square feet a decade ago. The median size of new single-family home in 2025 is about 2200 sq ft in 2025.
The root cause problem is we no longer build smaller homes in the United States. We only build super-sized homes.
Thus, even if we “fixed” issues like capital gains taxes (discouraging home sales) and other factors, there isn’t anywhere for most older adults to downsize to.
More on this in a couple of days.
