America Spent Years Without Enough Homes to Meet Demand, and Now It May Not Have Enough Homebuyers

Buyers kept coming faster than builders could keep up for more than a decade, and prices climbed as a result. A new analysis suggests that balance could flip by the mid-2030s, as an aging population and slower household growth start to outpace new construction. The change wouldn’t fix every local shortage, but it could reshape prices and bargaining power nationwide.

The Numbers Behind the Coming Shift

Led by Mortgage Bankers Association chief economist Mike Fratantoni, the report puts total housing need over the next decade at roughly 11.34 million units, spanning 2025 through 2035. Builders, meanwhile, could deliver anywhere from 10.57 million to 14.56 million units, with a middle estimate near 12.65 million. Should supply climb toward that upper figure, growth could pull ahead of demand well before 2035 arrives.

Why Demand Is Expected to Cool

Behind the numbers is a demographic shift. Baby boomers, the generation that helped drive the last housing boom, are aging out of their peak buying years, while younger generations are smaller in size. Birth rates remain historically low, and reduced immigration has slowed population growth even further. Together, these trends point to fewer new households forming and less pressure on housing supply overall.

Builders Are Already Growing Cautious

Some builders already appear to be pulling back. Homes sitting on the market climbed to 10.3 months of supply, firmly in buyer’s market territory, right as new construction slowed. Overall housing starts dropped 15.4% between April and May, settling at an annualized 1.17 million units, driven largely by a decline in multifamily construction. Single-family starts alone fell 1.9% monthly and 6.7% annually to 882,000 units.

Millions of Young Adults Are Waiting on the Sidelines

Falling household formation may not signal lost demand so much as demand on hold. According to Realtor.com, roughly 25.2 million adults under 35, about one in three nationwide, were still living with parents in 2025. Most weren’t out of work either. Seven in ten of those between 25 and 34 held jobs, pointing to affordability rather than unemployment as the real barrier to moving out.

Housing Costs May Be Shaping Birth Rates Too

Housing and demographics may be more tangled than population trends alone suggest. U.S. fertility hit a record low in 2024 at 1.64 births per woman, short of the 2.1 rate needed to sustain the population. Housing costs may be a factor. One study tied rising prices to 51% of the fertility decline between the 2000s and 2010s, estimating 13 million additional births by 2020 if costs had held steady since 1990.

The Shortage Debate Is Nowhere Close to Settled

The report’s forecast hasn’t settled the broader debate over how large the housing shortage really is. Estimates range from just over 1 million homes to as many as 10 million, with the National Association of Realtors putting the gap at 4.7 million units. Kevin Thompson, CEO of 9i Capital Group, doubts builders will cut prices much at all, predicting smaller homes sold at a higher price per square foot instead.

The Divide Between Fast-Growing and Slow-Building States

Any nationwide surplus wouldn’t land evenly. Fast-building states like Arizona, Texas, and Florida could see softer price growth as new supply keeps arriving. States held back by restrictive zoning, high permitting costs, and limited land, like New York, New Jersey, and Massachusetts, are likely to see prices keep climbing regardless of national trends. A renter in a growing metro may see real relief, while a buyer in a tighter market may see little change.

What a Shift Like This Could Mean for Buyers

For buyers who’ve struggled with affordability, a larger, more balanced supply could bring real relief, more listings to choose from, and a stronger footing at the negotiating table. Still, Alex Beene, a financial literacy instructor, cautions the shift won’t fix affordability on its own. Most sellers will keep asking for as much as they can get, and falling prices from motivated sellers may not translate into a meaningful rise in new homeowners.

A Decade-Long Shift, Not an Overnight Fix

Whatever comes next won’t happen overnight. According to the report’s researchers, homes held by aging Baby Boomers are expected to trickle onto the market slowly, spread across years rather than arriving all at once. If builders keep outpacing demand, price gains could cool, and buyers could see more options, but the shift will likely take a decade or more to fully play out.