N .P .R. This is The Indicator from Planet Money, I'm Darian Woods.
And I'm Weilin Wang.
So there is this term that's been floating around for a couple of decades now.
The silver tsunami.
Yes, we've talked about this on our show and it refers to the aging population in the US, especially members of the baby boomer generation.
And you know, some people find the term a bit derogatory because it's likening old people to a natural disaster.
That's not what we meant.
It's pretty rude. I guess so, now that you mention it.
Nevertheless, the term has become a popular shorthand for all the big cultural and economic changes that stem from this generation getting older.
And when it comes to housing, the so -called silver tsunami has sometimes been seen as a silver bullet to address a major issue, housing affordability.
There's a theory that a wave of empty nesters putting their homes on the market will boost supply and bring home prices down.
Today on the show, we talked to one economist who's vetted this hypothesis, and he tells us why the silver tsunami solution to housing affordability might be more of a red herring.
That's coming up after the break.
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I don't know what your weekend plans are, Jarian, but I do know where you are likely to find Orfeh DiVangi.
He's a senior economist at Zillow.
I personally look at the housing market all the time.
I love housing. That's why I work at Zillow.
And so I'm the kind of guy that takes my kids to look at housing on the weekends.
Look, each to their own, I will not be there.
And over at Zillow, Orfeh and his colleagues have been wrestling with a big topic.
We have a massive affordability challenge across the country.
And so we're looking for solutions.
And there was one fix that Orfeh kept hearing about from people in the housing industry.
That's silver tsunami.
Older individuals are expected to either downsize, right, or when they move on and pass the home on to their kids, potentially their kids would not want to live in these older, bigger homes and actually put them on the market for sale.
And so a lot of people have thought maybe if we get the silver tsunami, maybe affordability could improve.
Orfeh says that as of 2022, about 16 % of households in the US were empty nests.
This is defined as households where people are at least 55 years old, do not live with any children, have at least two extra bedrooms and have been living there for at least a decade.
And at least one of those bedrooms has been turned into a sewing room.
Orfeh also calculates that the number of empty nest households in the US is more than double the number of families that need housing.
So just looking at the nationwide figures, you might think, great, these downsizing empty nesters can sell their homes to families that need housing.
But Orfeh says not so fast.
What we learned in this research is that most of these empty nest households are located in places that are relatively more affordable already and away from the coast where people are flocking for higher -paying jobs and more opportunities.
So let's break it down a bit more.
Orfeh's research identified large housing markets where there are a lot of empty nest households.
Topping the list was Pittsburgh.
Over 20 % of households there are empty nesters.
Others on the list include Buffalo, Cleveland, St.
Louis and Detroit. These metro areas are already some of the most affordable in the country.
Zillow research shows that in those cities we mentioned, more than half of the homes listed for sale are considered affordable.
That means people who live there spend less than 30 % of their income on housing.
Orfeh says cities that are considered unaffordable are places like San Jose, Denver and Portland.
These cities are located pretty far away from where the empty nest households are.
They're also where younger people tend to move in search of job opportunities.
As a result, a lot of coastal cities have a relatively high proportion of Gen Z or millennial households that translates to fewer empty nest households than the national average.
For now, I think most people prefer to be in New York, Seattle, Los Angeles, San Diego, San Jose, especially young workers in search of the highest -paying jobs which are basically in the tech industry in the financial sector.
So there is this geographical mismatch at play here.
Even if downsizing empty nesters put their homes on the market, they will be selling in cities that are already relatively affordable and where younger workers aren't choosing to move.
Orfeh points out a couple other potential snags in the silver tsunami solution.
One is that a lot of these older homeowners may not actually want to move.
Last year, the mortgage giant Fannie Mae conducted a survey of homeowners aged 60 and over.
More than half the group said they will never sell their homes.
And there are different reasons for staying.
One is that many of these older homeowners either have a low mortgage rate or they already paid off their homes.
Right now, mortgage rates are still over 6 percent even with the Federal Reserve blowing interest rates as it did on Wednesday.
If these empty nesters sell, that could mean taking on higher mortgage costs for a new home.
Not a great financial move for a retiree who might be on a fixed income.
Another issue is where empty nesters who do sell end up moving to.
A lot of these older folks, they probably would want to live closer to their grandchildren.
Where? On the coasts.
In other words, they could end up in expensive areas.
And that could actually add to the upward pressure on housing prices.
Okay, so in Orfeh's estimation, the silver tsunami is not going to make much of a dent in the country's housing affordability problem.
He says the solution is to build more housing and denser housing, especially on the coasts.
And that means changing local regulations around things like lot sizes and parking.
I mean, look, I am the type of guy that doesn't like mowing the lawn anymore.
And I think most people my age feel the same way.
So we don't really need big lots anymore.
Family size has been shrinking.
Most Americans don't actually need a big house anymore either.
And so getting rid of things like minimum lot size requirements, minimum parking requirements are just two examples of things that we could really do without.
And there's still the issue of geographical mismatch that Orfeh's research highlights.
You know, those affordable non -coastal cities that aren't attracting young workers.
Take Pittsburgh, that's one of those affordable cities we mentioned earlier.
A business group there says that only around half of the area's 40 ,000 college graduates end up sticking around.
This group has created a program that offers professional networking and social events for young people in the city.
There are also more informal ambassadors like Margo Kimball.
A couple of years ago, she started something called Pittsburgh Girls Who Walk.
Like the name suggests, it is a group of women that take walks together around the city.
Margo says she sometimes meets people who are potential trans clients.
And I've even had people come to walks where they're kind of testing Pittsburgh out before making a big move.
So I usually try to keep those people a little bit of extra company on walks, and kind of find out what they're looking for in a city if they are thinking of making a big move.
Because, you know, there is a community here for just about everything.
One member of Pittsburgh Girls Who Walk is Jesse Roos.
She was raised in the area and left for college.
When she returned to Pittsburgh as an adult, she wanted to make the city new to her again.
So she joined her first walk.
We walked along the riverfront trail, and it just was such a good community right off the bat.
When I left, I remember texting my partner at the time like, oh, I think I made some friends.
So Margo and Jesse are these counterexamples to the broader dynamics that Orfeh has identified.
These are young professionals who have settled in an affordable city away from the coasts.
But if they get their way, they may persuade some of the peers to join them.
Jesse says some of her college friends, after trying out the expensive in -demand coastal cities like Los Angeles, seem to be open to the possibility.
It's kind of just seeing that shift of going from very expensive cost of living to wanting to settle into a place that's a little bit more affordable.
This episode was produced by Cory Bridges with engineering by Neil Tevault.
It was fact checked by Sierra Juarez, Kinking Cannon is our show's editor, and the indicators of production of NPR.
Wait, was your trotted bedroom turned into a sewing room?
Actually, no, it was perfectly preserved.
Really? Yeah, yeah, yeah, down to the stuffed animals, the books.
The teen idols from the 90s on the wall.
Jonathan Taylor Thomas, I'll never forget you.
I should turn this into a museum.
Hey, everybody, it's time to join NPR's All Songs Considered as we celebrate a very tolerable Christmas with a mix of seasonal songs and special guests.
Yeah, we're in for the saddest Christmas ever, stuck with Robin, who is basically a lump of coal in the shape of a man.
Hear new episodes of All Songs Considered every Tuesday wherever you get podcasts.
On the TED Radio Hour, don't you hate it when leftover cilantro rots in your fridge?
I have to tell you, cilantro is like my nemesis.
Food waste expert Dana Gunders says that's just a hint of a massive global problem.
Food waste has about five times the greenhouse gas footprint of the entire aviation industry.
Ideas about wasting less food.
That's on the TED Radio Hour podcast from NPR.
