Baby boomers' aging won't curtail demand.

The aging of baby boomers won't lead to less demand for housing and lower housing prices in the coming years. Some analysts have pointed to a study that found people over age 70 in 1980 demanding much less housing than people in their 50s. This led to a prediction that, as the large baby boomer population passes through age 70, market for houses and housing prices will plummet.

That's not likely to happen, maintains Patric Hendershott, professor of finance, Ohio State University. Columbus. The reason has to do with education. People with lower education levels -- and consequently less income -- have lower demand for housing. "Seventy-year-olds in 1980 had far less education and income than 50-year-olds, due to the surge in education after World War II," he points out. "But baby boomers, because of their higher education levels, and thus higher lifetime earnings, will have a lot more income when they retire than did previous generations. As a result, they aren't likely to cut back on housing demands. Aging alone should not trigger declines."

Educated people have greater housing demands, as well. People with...