The media – and social media – has begun raging that the housing market problems are due to “Boomers” not downsizing. This allegation is mostly divorced from market realities – “Boomers” are supposed to sell their “large homes” and downsize to smaller homes such as 1,200-1,800 sq ft.
The problem is the US has mostly not built homes that size in the last 50 years. There is no readily available supply of small homes. In fact, even the smaller homes built in the past have been generally remodeled and expanded in size over the years.
More data and commentary on this -> Demographics: “Boomers” are the cause of high priced homes – Coldstreams
The following was created with AI assistance.
🏗️ The Downsizing Dilemma
The narrative that Boomers should “downsize” runs headfirst into a decades-long trend: America stopped building small homes.
- Average new home size (2025): ~2,408 sq ft
- Peak size: Over 2,600 sq ft in the mid-2010s
- Threshold: New homes have consistently exceeded 2,000 sq ft since 1990
This means that even if Boomers wanted to downsize, the inventory of modest, age-friendly homes simply doesn’t exist at scale — especially in desirable, walkable, or healthcare-accessible areas.
🧱 Why Smaller Homes Disappeared
- Zoning restrictions: Many municipalities prohibit or discourage small-lot single-family homes, duplexes, or ADUs.
- Builder incentives: Developers maximize profit by building larger homes on fewer lots.
- Financing bias: Mortgage structures and appraisal systems favor square footage over livability.
- Cultural inertia: The “American Dream” still equates homeownership with size and land.
👵 Aging in Place vs. Market Reality
Boomers are often portrayed as “hoarding” large homes, but the reality is more nuanced:
- Many are aging in place because their homes are paid off, familiar, and located near services.
- Downsizing often means higher cost per square foot, less privacy, and fewer amenities.
- The lack of single-level, 1,200–1,600 sq ft homes in safe, well-located neighborhoods is a major barrier.
This contradiction is especially stark in regions like the Intermountain West and Pacific Northwest, where migration pressures and land constraints collide.
Additionally, capital gains taxes on large home price capital gains discourages older adults from selling. Further, after paying taxes they may not be able to afford a home in their area – where it is likely they have family connections. Thus, they are stuck – due to tax policies and lack of smaller homes.
