According to new data from Cotality, the long-predicted flood of homes expected from America’s aging population is arriving far more slowly than housing markets once anticipated.
In the 12 months through August 2025, a record 340,000 U.S. homes were transferred through inheritance, Cotality data show. While that marks a historic high, those hand-me-down properties accounted for just 7% of all residential property transfers nationwide–highlighting how little supply is actually reaching the open market as resale activity continues to slump.
For years, housing economists have argued that the aging of the Baby Boom generation would unlock a “Silver Tsunami” of housing supply, easing affordability pressures by pushing more homes into circulation. Instead, Cotality’s findings suggest the opposite is happening: seniors are holding onto homes longer, and an increasing share of properties are skipping the market entirely.
Nowhere is this more visible than in California. Nearly 60,000 homes in the state were transferred through inheritance in 2025, representing about 18% of all property transfers–another record, according to Cotality. For the first time, inherited homes in California more than doubled the number of newly built homes sold during the same period.
State tax policy plays a central role. California caps annual property tax increases at roughly 2%, regardless of market appreciation, and that tax basis can be transferred to children and grandchildren on the first $1 million of assessed value, provided the heir uses the home as a primary residence. The result is a strong financial incentive for beneficiaries to move in rather than sell, effectively removing potential supply from the broader market.
At a national level, the rise in inheritances might appear to support the long-standing demographic thesis. But Cotality’s deeper analysis of U.S. Census data shows the anticipated surge in supply is being delayed by unprecedented levels of aging in place.
Baby Boomers–now the largest senior cohort in U.S. history–own more homes than any generation before them at comparable ages. Americans born in 1948 owned roughly 50% more homes at age 65 than those born just ten years earlier, according to Census-based analysis cited by Cotality.
They are also far less likely to move. More than 22% of homeowners born in 1938 exited their homes between the ages of 65 and 75. For those born in 1946, that share falls to just 17%, signaling a structural shift in how long older Americans remain in their properties.
The consequences ripple through the housing market. Aging in place slows the traditional cycle of downsizing, resale, and redevelopment–delaying the release of housing stock and, in many cases, preventing it from reaching the market at all. Instead, homes increasingly pass directly from one generation to the next.
For heirs, inheritance can offer rare relief in an era of high prices and borrowing costs, particularly in states where tax rules favor long-term ownership. For would-be buyers, however, the trend tightens inventory and prolongs affordability challenges.
The takeaway for policymakers is stark. Demographics alone will not resolve America’s housing shortage. While inheritance is reshaping ownership patterns, it is not expanding supply at the scale needed to rebalance the market. If affordability is to improve, the solution remains the same: build more homes.
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