The Baby Boom, the Baby Bust, and the Housing Market
44 Pages Posted: 14 Jan 2001 Last revised: 20 Feb 2022
Date Written: December 1988
This paper examines the impact of major demographic changes on the housing market in the United States. The entry of the Baby Boom generation into its house-buying years is found to be the major cause of the increase in real housing prices in the l97Os. Since the Baby Bust generation is now entering its house-buying years, housing demand will grow more slowly in the 1990s than in any time in the past forty years. If the historical relation between housing demand and housing prices continues into the future, real housing prices will fall substantially over the next two decades.
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