Aging, housing prices, and young adults' homeownership

This study empirically investigates the relationship between changing demographic patterns, particularly the increasing number of older adults, and the demand for housing across various categories, including different types, sizes, and tenures. Additionally, the study explores whether young adults face affordability challenges in the local housing market when they aspire to become homeowners. To address these research inquiries, the study employs fixed effects models using county-level data, combining the 2010–2020 Zillow Home Value Index and the 2015–2020 Zillow Observed Rent Index with county-level data from the United States Census Bureau and Bureau of Economic Analysis. The findings reveal that the rising number of older adults in the United States does not necessarily lead to a decrease in housing prices. Instead, older adults tend to prefer aging in their own homes or downsizing to smaller housing options rather than transitioning to rental properties. This preference, especially for single-family homes and smaller residences, actually amplifies the demand for such housing, potentially creating affordability challenges for young adults. Nonetheless, these patterns appear to be influenced by the growth of the population of older adults aged 65–74, rather than those aged 75 and over. •Having more older adults does not generate downward pressure on housing prices.•A higher old age dependency ratio was negatively associated with rental prices.•Older adults prefer to age in their own homes or to downsize rather than rent.•Older adult preferences might create affordability barriers for young adults.•An increase in the population aged 75 and above lead to a decline in housing prices.