There was a time when the “forever home” was the crown jewel of the American Dream. You bought it young, you raised a family in it, and you died in it. Simple. Clean. Reassuring. For baby boomers, that idea was more than a lifestyle choice – it was practically a religion.
But here we are in 2026, and the picture looks very different. That beloved forever home is quietly turning into something else entirely: a financial burden, a physical mismatch, and a generational flash point. Let’s dive in.
Boomers Own a Disproportionate Slice of the Market
The sheer scale of boomer homeownership is staggering, and it sets the stage for everything else. While baby boomers comprise just over 20% of the U.S. population, they account for more than 37% of homeowners nationwide. That is an enormous concentration of housing wealth sitting in the hands of one generation.
New Hampshire, Maine, and Vermont boast some of the highest concentrations of baby boomer homeowners in the nation. Hawaii surpasses all states, with nearly 43% of homeowners belonging to the baby boomer generation. Delaware and Florida follow closely behind. In popular retirement states, boomers have effectively become the dominant housing force.
Baby boomers inhabit 32 million owner-occupied homes, accounting for two out of five homeowners in the United States. Generations born before the boomers own another 14 million homes. Collectively, the vast inventory of homes possessed by older Americans is worth an estimated $13.5 trillion. To put that in perspective, that is roughly equivalent to nearly three-quarters of annual U.S. economic output. That is not just a housing statistic. That is a structural reality.
Most Boomers Simply Refuse to Sell
Here is the thing that surprises people most: the majority of boomers are not just hesitating to sell. They are flat-out refusing. By far the most common answer is “never,” with 61% of boomer homeowners saying they plan to live in their homes for the rest of their lives. That number is up seven percentage points from 2024. Meanwhile, just 10% expect to sell in the next five years.
Just 10% of boomers plan to sell within the next five years, down from 15% in 2024, meaning that 90% of the homes owned by this generation won’t hit the market until the 2030s. Factors cited by boomers for not selling include having paid off their mortgages, not wanting to start over, planning to leave homes as inheritances, and concerns they can’t afford a new home.
Nearly nine in ten boomers believe buying a home is almost always a good decision, and 84% say it represents financial security. More than 40% consider not owning a home a sign of failure. That cultural weight is real, and honestly, it helps explain why so many refuse to budge even when staying put may no longer be in their best interest.
The Lock-In Effect Is Trapping Boomers in Place
Financially speaking, many boomers feel genuinely stuck. It is not stubbornness so much as cold, hard math. During the pandemic, many baby boomers secured extremely low mortgage rates, diminishing their motivation to relocate, which further constrains the housing supply. Trading a 2.5% rate for a 7% rate to buy a smaller home makes zero financial sense.
Median homeowner tenure in recent years is at a historically high level, having almost doubled from 6.5 years in 2005 to 11.9 years in 2024. People are staying put longer than at any recorded point in modern housing history. That is not a coincidence.
This lock-in penalizes millions of seniors who might otherwise sell their homes, particularly households transitioning to assisted living and nursing homes. So the very people who might benefit from selling feel economically punished for doing so. It is a trap built from tax policy, interest rates, and soaring home values combined.
The Physical Mismatch No One Talks About
The forever home that once fit a family of five looks very different when it’s just one or two aging adults rattling around in it. Baby boomers continue to own many of the country’s large houses, even after their households have shrunk to one or two people. Baby boomer empty nesters own twice as many of the country’s three-bedroom-or-larger homes compared with millennials with kids, according to a Redfin analysis. Those larger homes aren’t hitting the market, limiting supply for younger generations who could use those extra bedrooms.
There is a “pure housing mismatch for older homeowners,” says Gary Engelhardt, an economist at Syracuse University who studies aging and housing markets. “They are mismatched physically or functionally with the house that they’re in.” Think about that. A three-story home with steep stairs is not exactly ideal for someone in their mid-70s with creaking knees.
A 2020 report estimated that only 10% of homes in the United States are “aging ready,” meaning they have a step-free entryway, a first-floor bedroom and bathroom, and at least one bathroom accessibility feature. That means the vast majority of boomers sitting in their forever homes are living in spaces that were never designed for old age. The irony is almost cruel.
Rising Insurance Costs Are Squeezing Retirement Budgets
Even if a boomer has paid off their mortgage, the bills keep coming. Home insurance has become one of the most punishing costs for retirees on fixed incomes. Home insurance premiums in the U.S. increased by around 24% between 2021 and 2024, outpacing inflation by 11%. Insurance now represents 9% of the typical U.S. homeowner’s monthly mortgage payment, an all-time high.
The average annual income for a retiree in 2024 is $31,390. In most states, retirees are spending between 6% and 10% of their income on home insurance costs, but eight states in the southeastern U.S. require as much as 11% to 20% of income to be allocated for such costs. Residents in three states – Oklahoma, Louisiana, and Florida – are spending 21% to 34% of their income on home insurance premiums. These are retirement destinations that boomers specifically flocked to. Now those same states are financially punishing them for staying.
These heightened costs make living exclusively off Social Security benefits more difficult. Federal Reserve data indicates that 21% of retirees utilize Social Security benefits as their only source of income. For those people, a surging insurance bill is not an inconvenience. It is a genuine crisis.
Neglected and Outdated Homes Becoming a Time Bomb
Many boomer homes have been sitting essentially untouched for decades. And that is starting to become a serious problem. Numerous boomer homes have become akin to time capsules, untouched by home improvements. This stagnation in home updates has resulted in a lack of essential safety and accessibility features for comfortable aging in place.
68% of boomers live in older homes built 30 or more years ago, and many have not made improvements since. Imagine a roof that hasn’t been touched since 1990, electrical wiring from a different era, plumbing that’s been patched and re-patched. Two-thirds of boomer homeowners who have lived in their homes for two or more decades do not plan to make any home improvements. For over 70%, changes allowing for longer residence are not in the plans, and over 80% have no plans to add safety or accessibility features.
If these trends continue, the market may face a crisis in the coming decade due to an aging inventory of neglected homes. This could put significant pressure on the home improvement industry and strain the budgets of inheriting millennials, impacting the housing market further. Honestly, it is a slow-motion problem that is accelerating.
The Capital Gains Tax Trap Keeps Boomers Frozen
There is a policy layer to this story that most people miss entirely. Many boomers want to sell but get paralyzed when they see how much of their profit would go to taxes. The failure to account for inflation distorts the actual assessment of gains – a large part of what is called “capital gains” is actually just inflation. For example, a home that has doubled in value from 1997 to 2025 did not see any actual capital gain after adjusting for CPI, and yet would be taxed as such.
A second mechanism of lock-in is the “step-up” in basis at death. When a homeowner dies, the heir receives the property with a tax basis equal to its fair market value, eliminating the unrealized capital gains for income tax purposes. This creates an incentive to hold appreciated homes rather than sell during life, since the embedded tax liability can disappear at death. In plain English: it can be financially smarter to die in your home than to sell it. That is a deeply strange incentive structure.
It is estimated that hundreds of thousands of family-sized homes are sitting vacant, with heirs awaiting the death of a loved one so as to benefit from the step-up in basis at death. Real estate is supposed to flow through markets, not sit frozen in tax-driven limbo. The current system, I think, is actively working against a healthy housing market.
The Silver Tsunami That Never Arrived – At Least Not Yet
For years, analysts predicted that boomers would flood the market with inventory as they aged out of their large homes. They called it the “silver tsunami.” There’s some hope from baby-boomer households, with a wave of downsizing and declining homeownership rates expected to bring more than 9 million homes onto the market in the next decade, according to Freddie Mac. That sounds like a lot – but spread over a decade, it barely keeps pace with new household formation.
With the oldest baby boomers just now turning 80, Mark Fleming, chief economist with First American, says it will take much longer than two years for the mass downsizing to be complete. “Baby boomers are staying in their homes longer. They’re wealthier. They’re healthier. They’re able to stay in place longer than generations past.” So the tsunami metaphor was always a bit dramatic. It’s more like a slow, steady tide.
Baby boomers now own a majority of U.S. homes and have the financial means to stay where they are, keeping the housing market stuck for the foreseeable future. The upshot is that housing inventory will remain limited as boomers are less inclined to downsize to smaller homes and have the financial means to stay put. The storm, in other words, has been downgraded to a drizzle – and younger buyers are the ones getting wet.
Younger Generations Are Paying the Price
The downstream effects of boomer homeownership inertia are devastating for millennials and Gen Z. The median age of a first-time homebuyer in 1991 was 28. In 2024, that number jumped to 38. In 2025, the median age of a first-time buyer reached a historic high of 40, according to a report from the National Association of Realtors. That is more than a decade of deferred homeownership between generations.
Wages haven’t kept up with home prices. According to a 2024 report from the U.S. Department of the Treasury, rents and house prices have been rising faster than incomes across most regions of the U.S. Americans need to make about $141,000 to afford a median-priced home, but the average salary for a person in the U.S. is about half of that.
Today’s 27-year-olds are falling behind where their parents were at the same age. It’s the same story with millennials in their mid-30s – 56% of 35-year-olds owned homes in 2024, versus 59.4% of Gen X and 61.5% of boomers at that age. Generation by generation, the ownership ladder is losing a rung. And the boomers are sitting on most of the remaining ones.
The Inheritance Reality Is More Complicated Than Expected
Some younger people comfort themselves with the thought that they will eventually inherit their parents’ homes. The data says: don’t count on it too soon. The average age of inheritance, like the average age of first-time homebuyers, is getting higher. With people living longer, it’s now around 51 years old, compared with 41 in 1989. By the time many millennials inherit, they will already be past the peak family-formation years.
Boomers own 28% of the country’s large homes, keeping family-size housing locked up. Multiple generations living in a home will likely become more common, as will passing properties down to heirs. The concern among experts is that homeownership could shift from something you earn to something you inherit – essentially becoming hereditary. That is a fundamentally different kind of American Dream.
Once millennials do inherit formerly-boomer-owned homes, worries regarding the age and wear of the homes may arise. Baby boomers will pass down their out-of-date homes, leaving many millennials and Gen Z to deal with expensive and extensive repairs and upgrades, further adding to millennial homebuyer pessimism. The great wealth transfer many anticipate could come attached to a very large repair bill.
The forever home was built on an era of cheap mortgages, steady wage growth, and genuine economic optimism. That era is gone. The homes remain, millions of them, held by a generation navigating the gap between the dream they were sold and the physical and financial realities of aging. For boomers, the forever home is slowly shifting from a symbol of success into a complex set of trade-offs. For everyone else, the ripple effects are just getting started.
What do you think – is the forever home still the right goal, or has the housing market simply outgrown the concept? Share your thoughts in the comments.