US Housing Market Faces Urgent Shift as Deaths Surpass Births

URGENT UPDATE: The U.S. housing market is bracing for a major demographic upheaval, with real estate analyst Nick Gerli warning that the number of deaths is projected to exceed births by 2033. This alarming forecast, based on a report from the Congressional Budget Office (CBO), suggests profound changes are imminent for home buyers and sellers alike.

The CBO’s report reveals that the U.S. population growth rate is expected to decline significantly, from an average of 0.9 percent (1975-2024) to just 0.2 percent over the next three decades. As the nation grapples with a chronic housing shortage, this demographic shift could mean an influx of available homes, fundamentally altering the dynamics of the housing market.

Gerli, who heads the real estate analytics platform Reventure App, emphasizes the urgency of this situation. He states, “More deaths than births in the U.S. by 2032-2033 will lead to structurally lower homebuyer demand.” The implications are stark: as family formations decline, so too will the necessity for young people to purchase homes, leading to increased inventory and potentially lower prices.

This demographic trend is not just a number crunch; it has real consequences for Americans. Younger generations are already struggling to enter the housing market, often outbid by wealthier buyers. The current landscape of high home prices, soaring mortgage rates, and rising property taxes is forcing many to postpone family plans, further exacerbating the issue of declining birth rates.

According to Gerli, the anticipated drop in homeownership among Baby Boomers will result in an estimated 9 million fewer homeowner households by 2035. He warns, “This will likely have a disinflationary and/or deflationary impact on home prices over the long term.” With more homes coming onto the market, especially as the Baby Boomer generation ages, the housing market is poised for transformation.

However, not all regions will experience these shifts equally. States like Florida are already witnessing a contraction, with a reported 4 percent decrease in births. Gerli notes that the implications will reach every state, from California to Florida, although some areas will feel the impact sooner than others.

As the demand for traditional family-sized homes declines, Gerli predicts a shift in housing preferences. “The demand for larger homes will decrease as fewer families are being formed,” he explains. Conversely, there may be a rise in the appeal of smaller homes, as the market adjusts to changing demographic needs.

Gerli took to social media platform X to voice his concerns: “Many participants in the housing market are ignoring this issue,” he stated, emphasizing the need for homebuyers and investors to grasp the long-term effects of this demographic trend.

The CBO’s earlier report noted that without immigration, the U.S. population could begin to shrink as early as 2033, primarily due to persistently low fertility rates. This raises significant questions about the country’s demographic future and its reliance on immigration for growth.

Looking ahead, the changing American demographic landscape will likely hinge on immigration policies and trends. Gerli acknowledges a level of uncertainty, stating, “Things could shift” over the coming decades. He referenced historical precedents, including the baby boom of the 1940s and 50s, as evidence that societal factors can influence birth rates.

The bottom line: As the U.S. faces a potential demographic crisis, the housing market is on the brink of substantial changes. Homebuyers, investors, and policymakers must remain vigilant and responsive to these emerging trends.

Stay tuned for further updates as this urgent situation develops.